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

The House late Thursday moved toward passage of a measure overhauling the 1996 Telecommunications Act, as a contentious amendment strengthening the so-called network neutrality provisions in the bill was defeated, 269-152. The bill is largely designed to expedite the entry of the Bell telecommunications companies into the video services market by allowing them to obtain nationwide franchises. The Senate Commerce Committee is expected to take up similar legislation in two weeks. Energy and Commerce Telecommunications and the Internet Subcommittee ranking member Edward Markey, D-Mass., led an attack on what the bill’s critics saw as its two main failings: the lack of a requirement that new entrants into video services provide service to all neighborhoods, regardless of income, and the limited nature of the legislation’s network neutrality rules. The network neutrality debate centers around the ability of the owners of high-speed Internet “pipes” to discriminate against certain types of content in terms of pricing or delivery speed. Throughout Thursday’s debate, Markey, in pushing his net neutrality amendment, contended there was a need to impose strict rules to keep the Bells and cable operators from creating a two-tiered Internet — with a faster lane for preferred businesses and a slower lane for everyone else. Pitted against the Bells and cable operators were some of the country’s best known technology firms, which have lobbied hard for strict network neutrality requirements. “Unless we have net neutrality rules, [the telecommunications bill] would turn the Internet into cable TV,” charged Rep. Zoe Lofgren, D-Calif. “Google is a multi-billion corporation that was founded in a Stanford dorm room. That is about to change, unless this House adopts net neutrality rules.” But Energy and Commerce Chairman Barton, chief sponsor of the telecommunications measure, contended that going beyond the net neutrality language already in the bill would “hand the FCC a blank check to regulate Internet services.” As now written, the Barton measure would bar the Bells and cable companies from blocking competitors’ Internet traffic. Network neutrality advocates say this does not go far enough. By Drew Clark, Congress Daily

What do MoveOn, the Christian Coalition, the Gun Owner’s of America, and Google have in common? They are all supporting Net Neutrality. Here’s your chance to contribute to an ad that highlights that Net Neutrality ain’t just for liberal wierdos. Check it out at: MoveOn.org Civic Action: Democracy in Action

I don’t often choose to spend my time with lawyers, but Martin’s not your typical attorney. He’s hip to the latest in media rights, open source licensing, local politics, and other topics and he’s always a interesting conversationalist.

Anyway, Martin wrote a response to The Oregonian’s editorial on Net Neutrality. This national issue has passionate local advocates. Right on, Martin!

Now the financial services sector (banks) are recognizing that they could be impacted by the telco’s discriminatory Internet strategy. They are concerned they’ll be shunted to the the “slow lane”. Verizon’s response: they’d “better not start moaning in the future about a lack of sophisticated data links they need,” because they won’t get them as long as they back net neutrality.

Read more: Networking Pipeline | Verizon Threatens Financial Services Industry Over Net Neutrality Issue

David Isenberg is the real deal. He’s put together the most definitive presentation about the Net Neutrality issue I’ve seen. It’s here with audio narration. Must reading!
David comes out of AT&T, and in the old days he wrote an article called The Rise of the Stupid Network, that presciently described how the Internet’s principles would challenge those of the incumbent phone networks. The problems the Internet created for the Bells is what has led to the crisis we now face.

For those of you looking for the “dumbed down” version of the issue, here’s a video, while not entirely accurate in my view, introduces the subject to lay people.

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.

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

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.