THE CABLE PIPELINE

In a decision awaited by many since the FCC’s 2008 admonishment of Comcast’s throttling of file sharing sites, the District of Columbia Court of Appeals ruled to vacate the FCC’s order.

The courts seemed to be following the letter of law when making its decision to vacate. See (D.C. Circuit Court of Appeals’ Comcast/BitTorrent Decision is Out) In essence, the court, in a unanimous decision implied the FCC showed no statutory link under its Title I ancillary authority to mandate that Comcast not throttle file sharing in what has become an ISP network management issue based on Net Neutrality. It did not link that authority under current oversight powers, which currently does not include the Internet, to govern the issue, and remains that simple. Comcast on the other hand is right, under current law, to challenge the FCC. The question remains, how does this affect both Comcast and the FCC going forward?

Comcast Statement:

“We are gratified by the Court’s decision today to vacate the previous FCC’s order.  Our primary goal was always to clear our name and reputation. We have always been focused on serving our customers and delivering the quality open-Internet experience consumers want.   Comcast remains committed to the FCC’s existing open Internet principles, and we will continue to work constructively with this FCC as it determines how best to increase broadband adoption and preserve an open and vibrant Internet.”

FCC Statement:

“The court decision earlier this week does not change our broadband policy goals, nor the ultimate authority of the FCC to act to achieve those goals”

Bottom Line:

The FCC must decide whether it will ask Congress for authority to regulate the Internet as a common carrier, as Net Neutrality proponents have suggested, or move to reclassify the Internet as a telecommunications service, under which it already has authority to govern. As a governing body, comfortable in mandating what telecommunications providers can do with respect to public practices; it now will have to go back to the drawing board to include the Internet. It clearly overstepped its boundaries in the Comcast issue, and without a clear legislative definition of its authority, will face future court dates with any further mandates, at least concerning the Internet.

In addition, Comcast must have the uncomfortable feeling that while it many have won this battle, which it was entitled too, it may lose the inevitable war. How will the long range implications of a pending NBCU merger and the future of a growing and increasingly profitable Internet business be affected, not only for itself, but all other Internet providers as well? It is still too early to imply in a surely heated battle of control forecast to come.

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Kyle McSlarrow’s recent speech to The Media Institute mirrors a self-serving approach to control the pipelines, guised as a First Amendment right for ISP’s. The point Mr. McSlarrow is trying to make shakes the Freedom of Speech right for every citizen to the core. How can such rhetoric hide behind this basic citizen right in making an argument to control speeds, and content of global information sharing, the principle design of the Internet, and contention of the Net Neutrality debate? The Internet has become larger than any private company’s right to control it.

Instead of creating more controversy, the NCTA, (the right arm of the Cable TV industry), should be highlighting how these private sector companies can benefit consumers and businesses in a competitive landscape. The important issue should be how those networks will continue to upgrade infrastructure to act as a conduit for information, education, and global business competition.

The industry is not well served by its spokesperson in (drawing-a-line-in-the-sand), or trying to hijack the premise of free speech to avoid shackling of its pipelines that will clearly profit from a (lack of free speech). Unfortunately, the comments argument only drives home the need for government intervention.

Finally, to say that an industry which helped create CNN, FOX NEWS, HEADLINE NEWS, CNBC, BLOOMBERG, and other news organizations is under threat of losing its freedom of speech, is ridiculous. It has so many avenues of getting its point to the masses by creating pay content, the speech becomes an oxymoron. This is an ill-conceived speech cloaked with big business and power wanting control of the pipelines, and from an industry on the (tipping-point) of increased regulation.

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Here are the proposed rules rolled out this past Monday by FCC Chairman, Julius Genachowski in his Brookings Institute speech:

• prevent Internet access providers from discriminating against particular Internet content or applications, while allowing for reasonable network management
• ensure that Internet access providers are transparent about the network management practices they implement
• consumers are entitled to access the lawful Internet content of their choice
• consumers are entitled to run applications and use services of their choice, subject to the needs of law enforcement
• consumers are entitled to connect their choice of legal devices that do not harm the network
• consumers are entitled to competition among network providers, application and service providers, and content providers

It seems that the proposed new rules are taking a distinct party line affiliation with Democrats and Republicans on opposite sides. While this is common practice, it does indicate where interests lay in what will become a heated debate. From a Consumer’s Union/Google/Skype standpoint, the internet should be free and open to all comers with traffic and content flowing seamlessly and freely throughout the web, indicating their vested interests. Democrats have historically favored this type approach in making sure regulations keep the big companies in check.

 On the other hand, ISP providers like Comcast, Time Warner Cable, AT&T and Verizon are skittish about any proposed increase in regulations which might hamper innovation or encompass a regulatory nightmare in managing their services which were built on $billions of private investment.  This is where Republicans are (circling their wagons) to protect the business sector from which they rely on to fund their campaigns. Again, this is nothing new for anyone following the political landscape.

 There are some nuances which need to be considered from the perspective of both the ISP’s and the Wireless Industry which would have to contend with providing unlimited bandwidth to comply with rules requiring unfettered access by to all content. Bandwidths are not unlimited, and here lies a crucial part of the problem. There are peak times when a Wireless Network would have serious issues in accommodating all traffic if the rules, as proposed, were enacted. It just depends on the situation, and whether you are an ISP or a Wireless Carrier; there are limitations to the network.

 The good part to the equation for both consumers and the ISP’s are that comments will be taken by the FCC from all concerned parties who wish to weigh-in on the topic. The Democrats and Republicans, after initial posturing seem to understand that there is a middle-ground where the interests of each party can be addressed. There will be a vote by the FCC on October 22, 2009 to adopt the new rules, and if approved, comments will be taken as part of the rule making process.

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In a move to strengthen the Obama technology agenda on Net Neutrality, Julius Genachowski chairman of the FCC will speak to the Brookings Institute this Monday to role out his plan for this hot topic for legislators. This comes after Comcast was chided by the FCC for restricting its bandwidth to (Internet Hogs), or at least one in particular, where Comcast networks could not accommodate the increase in bandwidth thereby slowing performance for other customers.

 There are two sides to this story, one in which Google and various consumer groups have argued that the Internet is free and open to all comers, and should not be restricted in any way by providers, or refuse content companies wanting to be on their networks.  Both Google and Skype have argued to the FCC that both Apple and AT&T have denied them carriage on their wireless networks.

 On the other hand, companies like Comcast, AT&T and Verizon argue that ownership of the (pipeline) is private, and to accommodate the few who consume large amounts of bandwidth requires restrictions and/or (price tiering) to pay for upgrades to those networks, while at the same time, not slowing down overall traffic for all customers. Also, (exclusive contracts) come into play where companies enter into these agreements which, in essence, exclude others from their networks. Is this practice not simply confirming that a free market system is at work?

 In a recent post to my blog, Is Net Neutrality a Moot Point? , I address the issue with this statement; “While each of us should and will, per our government, have HSI access, the {Free Market System} will dictate, through unregulated competition, what and how much is received through this pipeline.”

However, consumers along with special interest groups have inundated legislators with their own thoughts on the issue quoted from the Washington Post:

 “Consumer interest groups have pushed for new rules and key lawmakers Thursday ratcheted up the debate when Rep. Henry Waxman (D-Calif.), chairman of the Energy and Commerce Committee said he would co-author a net neutrality bill with Rep. Ed Markey (D-Mass.) and Anna Eschoo (D-Calif.).”

 At issue is the premise that all content on the Internet should be freely shared on all networks, private or not, without restrictions on bandwidth consumption. While this is noble in thought, it does not reflect a true competitive market place, where companies vie for a “place in the sun” with price negotiations and quality content. This is why a company like Wal-Mart, Apple, and Microsoft have enjoyed unbridled success; they created a market and outperformed competitors.

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