McCurry and the Telco Spinmeisters
April 24th, 2006 by MarkCooperThe hiring of former Clinton Administration spinmeister Mike McCurry by a front-group funded by the Baby Bells is a text book example of telco manipulation of public opinion. McCurry effort to help companies like AT&T and Verizon put toll booths on the Internet underscores the inside the beltway, best-that-money-can-buy PR campaign they have embarked on to convince policymakers and the public that telephone companies should dictate which data flows over the Internet to the consumer.
McCurry is dishonestly spinning this brazen telco grab at Net control as a “Hands off the Internet” campaign.
The history of the Internet is clear and it contradicts this claim. The basic approach to the Internet requiring the unimpeded flow of data was dictated and funded by the Department of Defense in the 1960s to create an open communications system, a policy enforced by the National Academy of Science when it took over. The telephone companies, over whose lines the data flowed, were not allowed to engage in any sort of discrimination or manipulation of access to the Internet because it was the policy of the Communications Act, as implemented by the Federal Communications Commission in the Computer Inquiries (first launched in 1968) to keep the network neutral.
The cable and telephone companies want to abandon this fundamental principle for their high-speed Internet, broadband networks. They want to be allowed to discriminate against service providers and to charge the consumer for access to the network and the content, service, and applications providers for access to the consumer. They want to make exclusive deals with some services for a fast lane, while others are kept off that network. If they are allowed to discriminate they will charge lower rates or give priority in routing or speed to their own services or their allies, while they punish their competitors.
McCurry’s will join a stable of lobbyists and front groups dedicated to obfuscating this history and turning the facts on their head. In fact, this is the second time around for “Hands off The Internet.” In the late 1990s it was a front group located in a law firms with close ties to AT&T (then a cable company) and its General Council, Jim Ciccone, a Department of Justice official in the first Bush administration and the Executive Director the Bush Presidential library.
The cable operators managed to avoid the obligation of operating a neutral network in the late 1990s and the U.S. has been slipping in the race for broadband Internet adoption ever since. Cable operators charge between five and ten times as much for broadband access megabit basis as consumers are charged in the leading broadband countries like Japan and Korea in Asia, and most of the advanced European nations. The telephone companies charge even more. Because this “cozy duopoly” has been deregulated by the FCC, not Congress, there is no pressure to lower prices.
Worse still, with the network operators acting as gatekeepers for the first time in the history of the Internet, innovators will be driven away from the Internet space. In short, they want to turn the Internet into a version of cable service, where the network operator, not the consumer, decides what services succeed. They will have a strong incentive to stifle competition and control innovation. The vibrant, Internet economy will be strangled.
That is why Congress should act to ensure the public has nondiscriminatory access to the communications network. This is a principle that has applied to every transportation and communications network ever deployed in America – roads, canals, steamships, railroads, telegraph, telephone, and airports. In the information age, it is more important than ever.
Mark Cooper
Director of Research
Consumer Federation of America
markcooper@aol.com
(301) 384-2204
April 24th, 2006 at 10:27 pm
You say: This is a principle that has applied to every transportation and communications network ever deployed in America – roads, canals, steamships, railroads, telegraph, telephone, and airports. In the information age, it is more important than ever.
This isn’t true. Trucks pay higher license fees than cars, and HOV lanes are reserved for carpools and LEVs. Some roads are free, and some are tolled.
Similarly, the post office has different rates for different classes of service, all the way from bulk mail to Express overnight. The law that operates in all of the worlds transport systems is “you get what you pay for.”
You also try and setup some sort of analogy between the Internet of today and the ARPAnet, the experimental packet network funded by the DoD in the 60s. If you knew your history, you’d realize that this analogy doesn’t really support your point. ARPAnet did not treat all streams as the same, it had facilities for streams of different types and different classes of service.
The Internet of the future will re-incorporate some of the ARPAnet’s functionality, important things that were lost when TCP Internet came along and flattened the service space. And that will be a good thing.
Congressional micro-management of Internet access providers would be a bad thing, and nobody in his right mind wants to subject protocol engineering to the vagaries of politics. Some providers may be doing things that you don’t like, and some may be shooting themselves in the foot making bad policy decisions. But it’s better that they be allowed to do these things and fail than that we have our politicians enforce a regime of mediocrity on the entire Internet.
It’s really all about progress, not erecting a religion around the Internet circa 1984 and pretending it was the Best of All Possible Networks.
April 25th, 2006 at 12:23 am
You missed the point entirely. The telcos want to let their trucks go for free, charge high prices of some trucks, and keep other trucks off the road altogether. That is the discrimination that will kill the Internet.
The government prevented this kind of discrimination throughout the history of the Internet under what was known as the “Computer Inquiries.” In fact, all forms of transportation and communications throughout the history of the U.S. have been subject to this obligation of nondiscrimination, except for a short period when large corporations — the railroads and telephone companies in the late 19th century, tried to evade their obligations under common law. Congress was forced to step in to reopen these vital networks and imposed the obligation of nondiscriminatory interconnection and carriage on the railroads (Interstate Commerce Act, 1887) and the telephone companies (Mann-Elkins Act, 1910).
Allowing the cable and telephone companies to pick and choose which service providers have access to the public is not progress, but a step backwards to the late 19th century, when the railroads discriminated against grain shippers and AT&T refused to interconnect with independent telephone companies. There is nothing in the recent behavior of the telephone and cable companies to suggest that they would not immediately use this power to discriminate to undermine competition in the Internet applications and service market.
April 25th, 2006 at 12:49 am
Mark’s exactly right here.
Yes, trucks pay a higher license fee, because they use — to keep the analogy — more of the pipe. But any truck, ANY truck can gain access to the road, regardless of where they came from or where they’re going.
Google and other large content providers also pay a bugger license fee — that is they buy a bigger pipe, be it an OC3 or a T3, or for smaller content providers, a SDSL, or whatever. They pay for access. Repeat, they already pay for access.
Those end users who want to use more bits, and faster, can purchase the top speed tier. I have a standard ADSL connection, but if I wanted, I could pay more for a faster connection. It’s real simple, the Big Teleco’s want to be able to extort content providers for more money. What we haven’t talked about is why.
You’ve probably noticed that Cable companies haven’t chimed in yet on this issue. Why? They’ve got bigger pipes. This is a Bell/Teleco issue because they want to compete in the video market. Problem is, their pipes aren’t fat enough. Even VDSL2+ upgrades won’t cut it. So what’s their solution? Prioritize packets — THEIR video packets, and put everyone else’s in the slow lane.
This is all happening now, because as Mark said, the Computer II rules governing DSL (and not cable modem) were ditched by the FCC last year, and this change goes into effect in August. The Barton bill gives the Bell’s their national franchising deal, and prevents the FCC from codifying neutrality rules. It’s a classic piece of special interest legislation.
Please don’t think you can rely on the Bell/Cable duopoly to continue the digital revolution. They’ll turn it into Cable TV.
All net neutrality would do is maintain the openess of the Internet. With it, the Bells will have incentive to build out their networks with fiber. Without it, they’ll just upgrade some areas with VDSL, push their video down the pipes, and call it a day. Cable will eat away their voice market share, and the slow expensive duopoly will continue. Meanwhile, the 100Mbps $39 connection that’s available in Japan (see today’s ComDaily) will never, ever become a reality here.
April 25th, 2006 at 1:11 am
We haven’t had a Bell/Cable duopoly for a long time because we have various forms of wireless in the mix, such as VSAT from numerous providers, Muni WiFi, 802.16, and soon 802.20. So cable Internet and DSL are surrounded on all sides by options and it’s not like the Telcos and the CableCos are in bed together anyway. Muni WiFi is especially interesting because it’s subsidized by advertising, just like broadcast radio and TV and unlike premium channels on cable and satellite.
What the phone company would be doing if it cut a deal with Yahoo to provide search and slowed down Google’s packets — not that they’re doing it, but to take your hypothetical as if it were fact — would be simply adopting a subsidy model from these other services. So if you want to argue that Telcos can’t offer advertising-supported services, why don’t you go after radio, TV, and Muni Wifi?
It’s completely insane for DSL to be governed by a different set of rules than Cable Internet, and the Telcos have every reason in the world to be upset over it. They have a huge investment in cable plant and equipement, and if they can’t make money on a level playing field of course they’re not going to upgrade the cable plant.
It’s idiotic to compare the situation with wireline broadband in the US against smaller and more densely populated countries such as Korea and Japan. Singapore is always ahead of everybody in broadband because it’s relatively easy to string cable and deploy multi-service access devices on an island of 225 sq. mi. with a population of 6 million affluent consumers.
This crazy “Save the Internet of 1984″ campaign is more about Free Beer than Free Speech, and that fact is so transparent that nobody’s buying it.
April 25th, 2006 at 1:55 am
Ha Ha.
Dude, go read the latest FCC data. 98.9% of residential lines are controlled by DSL or cable. And this is up from 6 months prior.
The free wireless services use advertising. Last time I checked, my SBC connection cost me some money each month.
The teleco’s shouldn’t be governed by different sets of rules. They all should be under net neutrality rules, and for that matter, open access.
Oh, and these teleco’s all made their “investments” under regulated monopoly treatment, some of which were under rate-of-return regulation. Hardly much of a “risk” of investment there.
And the population density arguement!!!!! It’s total bull, and it’s “idiotic” to make it.
Look at who leads the world in broadband penetration, ICELAND, whose population density is one-tenth of the U.S.’s, and the smallest in the OECD. In fact, if you look at the correlation between broadband penetration and population density, there is no statistically significant relationship (p=0.16).
The more relative metric is “urbanicity”, and that’s not statistically significant either.
In fact, in a full regression model of the OECD, with urbanicity, education, median income, poverty, and broadband price — only median income and poverty are significant determinants of penetration.
Go look at the numbers. And please, stop making the population density arguement, it’s just silly.
April 25th, 2006 at 7:12 am
Dude, go read the TV data and you’ll see that cable TV has been losing homes to VSAT for years now just like wireline phone service is losing them to cellular. DSL and Cable don’t have any 98 percent penetration, or anything even remotely close.
Cable TV charges us money to bring commercial supported TV into our homes and we gladly pay because the alternative is $10/channel. The same kinda deal is what the Free Beer/Net Neutrality movement opposes.
The cable plant upgrades that need to be made now to support NTT-style broadband aren’t being contemplated under monopoly conditions.
And oddly, the “arguement” you offer to my point about population density is a tiny little island, Iceland, where the people live in a couple of cities and spend 9 months of the year indoors. Marvelous.
Another dimension of the push to broadband in Japan and Korea is the quality of wireless phone service; 3GPP is commonplace in both countries and the cost of upgrades to towers is a fraction of what it is in the US due to — you guessed it — population density.
But the more important point you need to go study is whether any of the high broadband countries got that way under a Net Neutrality/Free Beer regulation background.
That’s my “arguement”, see what you can do with it, uh, dude.
April 25th, 2006 at 9:44 am
“Free Beer,” come on. We explicitly support the approach that has consumers paying for the level of network functionality that they want (something the cable companies and telcos don’t do in the video space with their forced bundling). Once consumers buy a level of functionality, all service providers and applications developers should be allowed to reach the consumer without any interference from the network operator (who is fairly compensated for the use of the facilities).
Teh network operators want to be paid twice — once by the consumer and once by the service providers or application developer — and they want to control which services reach the consumer. Sometimes they will restrict competition to protect their core franchise service. Sometimes they will restrict competition to give an affiliated or favored service an edge. In both cases the consumer and the economy are hurt.
April 25th, 2006 at 11:24 am
Dear Mr. Dick Bennet,
Your arguement is easy to “do”. Again, 98.9% of residential broadband lines are controlled by DSL or cable providers. That’s the latest from the FCC form 477 report, go read it. I didn’t say penetration.
Also, I dealt with the pop density arguement, then you put back a “live in a few cities on a tiny island”. This sounds like you’re trying to make an arguement for “urbanicity”. Good, you’re learning! However, there’s no significant correlation between these two factors either. None! Go run the numbers yourself and see. And, can you explain why a dense urban city like San Francisco doesn’t have fiber to the curb?
And yes, Japan, Korea, Iceland, the Netherlands, France, Sweeden, Denmark, Finland, etc… they all have common carrier regulation governing their broadband sector. All of them. Just like the U.S. did until we ditched it last August. Go read the country regulatory profiles at OECD.org.
We need better high-paid trolls around here.
April 25th, 2006 at 5:32 pm
You need to remember the USA is a freemarket society if the companies want to pay the providers for faster speed and better access they should be allowed to do that.
Get off your LIBERAL Democrat high horse and let the US fly free as it always has.
Jessica
April 25th, 2006 at 5:34 pm
I’m supposed to be impressed that 98.9% of the wires are “controlled” by the companies that string wire? Excuse me if I don’t fall over and worship you. I said that there are *wireless* alternatives to wire. Read carefully and you’ll pick up subtle details like that.
And regarding the other point, I asked how many countries with high broadband utilization have “network neutrality” laws. The answer is “none”.
The question is very simple: do Telcos that invest in cable plants that allow them to deliver enhanced voice and video services have an obligation to provide these facilities to free-riders at no charge? That’s absurd. Even in equal access rule for DSL allowed the Telco to charge a reasonable fee, so this really is a Free Beer issue rather than a Free Speech one. Google could easily send all their search replies as high-priority voice packets and undermine the network engineering that makes voice and video work on Diffserv-enabled networks if you people get your way, and that’s a disaster for network performance.
The Barton bill doesn’t mess with plain old Internet as it was in Vint Cerf’s day (1982), but it does allow enhanced services to be bundled. That’s eminently fair, and the American people aren’t going to complain about it.
April 25th, 2006 at 7:22 pm
Dickie my good friend,
Really, please go read the FCC 477 report. 98.9% of ALL BROADBAND CONNECTIONS, INCLUDING WIRELESS CONNECTIONS, BPL, etc… are controlled by MSO’s (cable) and LEC’s. All wireless (sat. and mobile) account for 433,207 of the 38,515,303 residential broadband connections which is 1.12%. Under the FCC for 477 rules, all providers of broadband report, even if they serve only one customer. So your wireless alternative is laughable. And it gets even worse if you ask who owns the backbone, and what interconnection agreements are there (Hint, this worried the FTC and FCC in the past when mergers were happening).
It’s silly for you to pretend you don’t understand this.
Oh, and Net Neutrality laws = Common Carrier regulations. If you don’t understand that, you’re in over your head pal. All the countries I mentioned (and others, except broadband leaders such as Mexico, Greece, Slovakia, etc…) have neutrality rules. Go look it up, do some research, please!
In Japan, Korea, France, and elsewhere where TV over IP has taken off, they don’t charge content providers for QoS. All bits are equal. The pipes are fat enough to handle it.
You want a world where the Telco’s don’t have to make investments in their networks in order to provide video. OK, fine, let’s have that. If Teleco’s want to compete in the video market with Sat’s and Cable, then let them, give them their much desired national franchising agreeements, and let them dictate what flows over their network. It will be great, I can’t wait!
But that’s not the Internet, its just another one-way cable TV system. Don’t you see how this will kill the Internet, hence the “Save the Internet” slogan?
But I’m sure you don’t get it — you have no clue of the democratic power of this medium. Do you think under a cableTV Internet system that you’d get to run your silly little blog with your deep thoughts on baseball? Sure, you could put it out for all dial up users to read — but oh, wait, dial up is still regulated under common carrier (= open access = neutral) rules.
As Zappa said, “Dickie’s such an ….”
April 25th, 2006 at 9:40 pm
Bukkake - Kindly show me a link to any foreign statute stipulating Larry Lessig-style Net Neutering and we can have a discussion. Until you can do that, this conversation is over.
And go learn some manners, you idiot.
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June 20th, 2006 at 8:30 am
[…] Picture it. George Washington University 2006. Amazon.com’s Paul Misener squares off against Mike McCurry, representative of the Newspeak Telco lobby "Hands Off the Internet." Outcome? Misener wipes the floor with him. […]
July 12th, 2006 at 6:02 pm
[…] ‘Amazon.com’s Paul Misener handily defeated Mike McCurry -co-Chair of the telecom front group "Hands off the Internet"-in a debate over Net Neutrality at George Washington University on Friday…read on" […]
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