Bader’s Bits

I have to admit I’m so frustrated by the Net Neutrality issue that I’ve tried to tune it out. The “bad guys” seem to be in the lead, the game seems rigged with money and inside influence, and I feel disempowered as a result. I know I should increase my participation, but the wind is a bit out of my sails.

Well, just when I might be overcoming my cynicism, out come Tim Doyle in the latest Forbes magazine issue with an insightful wrapup of why I should be frustrated. Here’s the article, in its entirety, to save you the effort of registering at their site. Post some comments on what you think.

OutFront
Milking the Internet
Tim Doyle, 08.14.06

Don’t expect a quick decision from Congress on network neutrality. Not deciding is too profitable.

After senator Ted Stevens, the Alaska Republican, explained recently that he opposed “network neutrality” because “Internet” (translation: e-mail) was delayed by the clogged “tubes” of the Internet, his awkward lingo was lampooned by comedian Jon Stewart. The parody became a YouTube hit. Laugh if you want. But the pols get to laugh all the way to the bank: The fight over the Internet and what fees should be assessed for access is a surefire moneymaker–for their campaign coffers.

On one side of the net neutrality fight are the telephone and cable companies who want the freedom to charge Internet companies extra for higher-speed access for their customers–fees they say will be used to build more capacity. On the other side companies such as Google (nasdaq: GOOG - news - people ), Microsoft (nasdaq: MSFT - news - people ), Yahoo (nasdaq: YHOO - news - people ) and Vonage want Congress to bar such charges by mandating what they call “net neutrality.”

The stakes are huge for both sides, so both are pouring millions of dollars into political contributions and lobbying to press their argument. Now you know why Congress would let this debate linger on. As long as the issue stays in play, the money keeps flowing. “Telecom reform has been a cash cow for members of Congress,” says Brookings Institution congressional scholar Thomas Mann. “The battles go on for years, and the fundraising requests never stop.”

Congress has been toying with a rewrite of the nation’s telecommunications law since 2003; net neutrality became a central issue last year. In June there were even signs of progress: The House passed a “reform” bill and Stevens’ Senate Commerce Committee, after 26 hearings, sent one to the full Senate. But this is an election year, so the legislators may not have the time to complete action on a bill.

So far, score one for the telephone and cable companies. They succeeded in keeping net neutrality (that is, a prohibition of volume-sensitive charges) out of both bills. No coincidence that telcos, even by Washington standards, are writing huge checks. Since the start of 2003 the telcos’ political action committees and employees have made a combined $27 million in political contributions and sunk another $146 million into lobbying, according to the Center for Responsive Politics. AT&T (nyse: T - news - people )’s PAC ranks as the biggest corporate PAC donor to Republicans so far this election cycle, at $1.1 million. Why so much? “Telecom is one of the most heavily regulated industries in the country,” says AT&T Chairman Edward Whitacre.

The biggest recipient of telco largesse during the 2005–06 election cycle, with $114,000 in contributions, was Senator Conrad Burns. He’s the Montana Republican whose reelection has been endangered by his connection to the scandal involving convicted lobbyist Jack Abramoff. In June Burns joined other Republicans in killing a net neutrality measure. Burns says he prefers less regulation.

The lightly regulated Internet companies and their execs have traditionally spent less time and money lobbying Washington. Microsoft, Yahoo, Google, Ebay and Amazon (nasdaq: AMZN - news - people ) have spent a total of $37 million on lobbying since the start of 2003, a fourth of the telco spending. Their PACs and employees have given $14 million in campaign contributions. But some Internet execs are substantial Democratic donors. Google Chief Eric Schmidt, for example, has donated $42,500 since the start of 2004, including $9,500 to the Oregon Democratic party and to Senator Ron Wyden (D–Ore.), who has vowed to block any anti-net neutrality telecom bill.

Yet PACs and individual donations don’t tell the whole story. There’s a newer source of money and influence here: the Internet itself. In years past, telecom legislation barely registered with voters. But net neutrality is different, whipping up grassroots passion throughout the Internet.

In April conservative groups such as the Gun Owners of America and the Parents Television Council teamed up with liberal stalwarts MoveOn.org and the Consumer Federation of America, among others, to form Savetheinternet.org. Already one million Internet users have signed the group’s online petition. The opposition hasn’t been entirely spontaneous: Ebay Chief Margaret Whitman sent millions of customers an e-mail warning of a “two-tiered” Internet. Ebay, Yahoo and Microsoft have formed their own site, Itsournet.org, to gin up opposition.

Democrats in particular see a potential way to profit from the net outrage. During the last presidential election more than half of Democratic donors, but just a fourth of Republican ones, made at least one donation online, according to the Institute for Politics, Democracy & the Internet. Possible presidential contenders Senators Harry Reid, Hillary Clinton and John Kerry have all vowed to oppose any bill that doesn’t include neutrality. “Moveon.org has seized on this and tried to make it a litmus test for Democrats,” says AT&T lobbyist James Cicconi.

Indeed, seven-term Congressman Albert Wynn (D–Md.), who voted for the House bill, faces a tough primary test from Donna Edwards, a foundation head campaigning on net neutrality. In just six weeks Edwards raised $190,000, 40% of Wynn’s war chest.

Stevens says he doesn’t yet have 60 votes to overcome a filibuster and move a telecom bill lacking network neutrality. Cicconi says the telcos won’t accept a bill with it. And so the spending goes on. In April AT&T and others hired Clinton-era White House press secretary Michael McCurry to run a coalition, Hands Off the Internet, and its Web site and blog. Grass roots, ostensibly

MobilePro, one of the responders to the Unwire Portland RFP, has backed out after being named winner of the Muni wireless contract in Sacramento. At the 11th hour, the city council, citing deals in Portland, SF and others, asked for a free, advertising based service. However, they wanted that without providing any of the anchor tenant contracts or other sources of revenue. MobilePro balked.

What a mess. Without knowing all the details, it’s hard to know if there’s a right or wrong. I’m just glad that Portland’s deal was apparently better thought out than what happened in Sacramento.

dailywireless.org - MobilePro Pulls out of Sacramento

I must admit I liked it when life was simpler. The computer and Internet industry was run by the proverbial “400 geeks” that just kept moving from one company to another. The last thing we had to worrry about was the government.They didn’t care about us, and we didn’t have to care about them.

First Microsoft learned that they needed to care because their monopolistic position created suspicions of anti-competitive behavior. They pretty much beat the rap in the U.S., but the EU has taken a tougher stand (more). Microsoft’s behavior, especially after it squashed Netscape flat, pretty much took the oxygen out of the software startup environment, because no one had a good answer to the VC’s question: How will you compete against Microsoft? In my humble opinion, Microsoft, while it offers many admirable products, has until recently effectively stifled much potential software innovation.
Fast forward ten years. It ain’t about Microsoft any more. The answer to the VC’s question is “open source” and/or “software as a service” and the investments are flowing. But thanks to the Internet and convergence, software is just one of the vehicles of computer innovation. It’s now the Internet and its use as a content distribution and communications network that’s where the action is. And while it seems as if it’s a wide open web, there’s huge money and control at stake. And now the big boys are in on the action and throwing their money and influence around; not so much to innovate, but to protect what they’ve got. And they are trying to protect it by getting laws passed that tilt the playing field in their favor.

Here’s a partial list of issues being addressed in a Senate bill just proposed:

• Punting the Net Neutrality to the FCC, asking them only to report problems
• Placing limits on recording digital radio like Sirius via a broadcast flag
• Baning digital TV tuners for computers that can record shows off the air

Read more at the Cnet article.
The good news is that the issues are so manifold and complex, and the positions are so far apart from the House version, that passage in this short-sessioned election year is unlikely. The best we might hope for is no action, but no action on Net Neutrality is a time bomb. The worst is that these companies establish effective control of the Internet for their unfair advantage and stifle the very innovation that has made it flourish.
So what to do? Write your congressman. Senator Wyden is on the right side of this issue. Support SaveTheInternet. If your politics allow support moveon.com. Tell your buddies at the big companies like IBM and Intel that they need to be the counterweight against the lobbying heavyweights.
We simply can’t allow the few media and telecommunications companies to turn OUR Internet into THEIR networks.

First Rhode Island announces a plan to build a WiFi cloud over the whole state. Big fish, small pond. OK, it’s 1,000 square miles.
Then, even though a number of Bay Area cities are already lit up, thanks to Portland Unwire Portland winner MetroFi, San Mateo County has plans for 35-city Bay Area wireless network.

Sure hope this stuff really works!

Yesterday, the House Energy and Commerce voted against the “Markey Amendment” which includes Net Neutraility language by a vote of 34-22.

The good news is a number of congressmen switched votes to the right side and that the issue is gaining public visibility, which means the congressmen will all need to defend their votes. More good news is that 250,000 signatures supporting the amendment were collected at Save The Internet in less than a week. Add your endorsement at their site.
The action now shifts to the Senate, where Senator Wyden’s proposal is being considered.
More news at dailywireless.org: Net Neutrality Down in House and Business Week: Tech Giants’ Internet Battle

It certainly was a great event for the community, and that’s what counts. I felt a sense of optimism that I haven’t experienced in many years about the growth in our “innovation economy”.

We’re very proud to be the Presenting Sponsor for the event this year, and hope that you found it worth your time as well. Leave some comments or email me to let me know what you thought and how we could improve things for next year.

For those of you that would like copies of the presentations, here they are:

• Open source economic development strategy.ppt This is the complete presentation that includes more specific programs and activities.
• Rethink Your Network (Updated pdf with graphics) For anyone with at least a T-1 to the Internet, or looking to put more infrastructure in a data center (like ours!), check out this presentation that describes metro area Ethernet services and how they enable better network deployments.
• Voice Over IP panel A brief overview of the voice over IP market, and why we think VoIP is a matter of “when” not “if” for just about every business.

Mike Rogoway digs in a layer deeper to answer more questions about the city’s wireless Internet service. Check out his article, (noteworthy because I’m quoted in it!).

At long last, the decision has been made. MetroFi has been chosen to build out Portland’s wireless network. Check out Portland based dailywireless.org for in-depth coverage.

We are totally jazzed about this new network. The RFP required that the network be “open access”, meaning that service providers like us will be able to deliver services on it. While there’s still lots of design work and contracts to sort out, we’re looking forward to being there early on. We expect to be delivering WiFi based services before year end, and WiMax class services early next year.

The SAO is sponsoring a wireless applications panel at Innotech. Come and learn more about Unwire Portland and some of the applications that the network will enable. See you there.

I promise that I won’t blog all the machinations of the various Congressional committees and subcommittees regarding Net Neutrality. There’s no guarantee that any proposal will actually make out of committee for a vote this session. But the battle lines are being drawn and the skirmishes are fast and furious.

Here’s a good article on the state of affairs from Consumer Affairs. The bottom line is the telcos are gaining momentum in burying the issue with “promises” everything will be OK. Frankly, I don’t trust them on this issue. We’ve got to get Net Neutrality legislated. Even that is no assurance, but it’s better than nothing.