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Programs, Get your Net Neutrality Programs

You know that an issue is heating up in Washington when new "grassroots" organizations start popping up.  Once you can't tell the players without a scorecard, an issue is definitely on the lobbyists' and Congressional radar screen.  Net neutrality has almost reached that critical mass.  At the House Antitrust and Telecom Task Force hearing last week, a short pro-net neutrality manifesto was handed out by The Net Neutrality Coalition.  A listing of its dozens of members can be found here.   Don't confuse them with Hands Off the Internet (HOTI), which opposes any  net neutrality mandates at all.  The National Journal recently had an interesting article about HOTI, whose financiers include AT&T, broadband over powerline companies and several conservative public policy groups like the American Conservative Union and the Frontiers of Freedom.

I said that net neutrality has almost reached critical mass.  Those of us living in the DC television market know that an issue doesn't really reach critical mass until we are bombarded by inane and arcane television commercials aimed only at 535 members of Congress and a thousand staffers.  Net neutrality is not there yet, but I have no doubt the ads will start in May.  Maybe we should run a contest to predict the themes.  By the way, the issue of national franchising for telco video offerings reached that critical mass about a month ago.  A group whose name I can't recall - it may be The Coalition for TV Freedom- has been educating us for weeks now with ads about Tyler, Texas and other bastions of TV freedom.  I don't know who's really paying for the Coalition's ads, but I suspect we'll find out.

Philippines VOIP regs

We're now in year two and counting of the FCC's proceeding to figure out how to treat VOIP services.  In the meantime, the Philippines became the latest country to revamp its regulations.  This is from the Asian Journal:

NTC sees waning opposition to its VoIP guidelines

THE NATIONAL Telecommunications Commission (NTC) has seen less and less opposition to its once-controversial guidelines that has effectively re-classified voice over Internet Protocol (VoIP) as a value-added rather than a voice service, an official told INQ7.net.

The re-classification allows companies that do not have a congressional franchise for telephone service to offer VoIP services. . . .

The NTC said that the recent development in Congress, where a House-sponsored VoIP bill has moved from second to third reading, has given a boost to its efforts to deregulate VoIP services in the country.

George Kintanar, a consultant for the House committee on information and communications technology, said last week that the House Bill 3476 has passed second reading.

"We welcome this news. But as you all know, the NTC has already been implementing its own guidelines on VoIP. This law will, however, help us because we thought in the beginning that the telcos will stop us from implementing our guidelines," Sarmiento said.

House Representatives Clavel Asas-Martinez, Abraham Kahlil Mitra, Simeon Kintanar, and Rozzano Rufino Biazon are co-authors of HB 3476, also known as the "Philippine VOIP Act of 2005."

A copy of the proposed measure indicated that the NTC will be the implementing agency for this proposed law.

The lawmakers believe that promoting VoIP services in the Philippines recognizes the role and contribution of communications in nation building.(INQ7)

Net Neutrality: Above the FCC's Pay Grade?

There were several developments on the Congressional front this week.  On Tuesday, the House Judiciary Committee's Task Force on Telecom and Antitrust held a hearing on net neutrality.  It was one of the most intelligent and substantive congressional proceedings I have attended in a long time.  If you missed it, the agenda, witnesses' statements and a webcast can be found here. The members of the Task Force (even the Republicans) were generally receptive to the concept of net neutrality.  They recognized how certain incumbents' announced plans to institute new charges for Internet traffic and to discriminate among various types of traffic on non-technical grounds present the potential for grave harm to innovation throughout the U.S. economy.  Of course, part of the Task Force's concern was motivated by a desire to protect their turf against incursions by the House Energy and Commerce Committee, which has been considering a telecom reform bill - the Communications Opportunity, Promotion, and Enhancement Act (COPE).  (Randy May of the Progress and Freedom Foundation analyzed the Committee's power dispute in a perceptive piece today.) 

Professor Tim Wu of Columbia Law School had a unique observation at the hearing.  In response to a question about whether jurisdiction over net neutrality/discrimination in broadband networks should be the bailiwick of the FTC or be left to the FCC, Wu pointed out that this was an issue not of telecommunications policy, but of national industrial or economic policy, because allowing discrimination by network operators hampers innovation in all industries that use the networks and  decreases the efficiency of the U.S. economy as a whole.  Therefore, he said, the FCC should not be determining U.S. net neutrality policy because its expertise and jurisdiction were limited to telecommunications.   Parties on all sides of the  net neutrality debate  should give the point much thought. 

On Wednesday, the Energy and Commerce Committee, which is very friendly to communictaions incumbents (particularly the remaining Bell companies), approved and amended the COPE bill.   The major provision of the bill is designed to speed availability of telco video services (IPTV) through the creation of a national franchise regime. The legislation would also give the FCC exclusive but limited broadband network neutrality authority, promote VoIP interconnection and E911, authorize municipal telecom/broadband services, and codify "Naked DSL" requirements.  The net neutrality provision is particularly odious.  In the guise of codifying the FCC's "Four Principles" of net neutrality, it would actually handcuff the FCC by limiting it to post hoc enforcement of those principles and denying it the ability to examine or promulgate rules prohibiting other types of discriminatory broadband behavior or violations of net neutrality.  Proponents of net neutrality testifying before the Task Force on Tuesday unanimously stated that it would be better to have no legislation than this provision; even USTA President Walter McCormick agreed.  Hopefully, the provision will be deleted or strengthened when (if?) COPE is considered by the whole House. 

Viral Marketing for Net Neutrality

Jeff Pulver is never boring.  Last week, he put some of his money where his mouth is, by announcing a viral video/ad contest to "save the Internet."  You can find it here.  If you read the fine print, the actual purpose is to "effectively communicate to government that they must write rules to enable us the Internet innovators to transform the Internet and communications experience."  In other words, Jeff wants to make net neutrality a potent political issue and offset the lobbying muscle of the entrenched network incumbents.  We'll see if he can do it.  I for one wish him luck.  And I'm forwarding this link to all my friends working in new media, in hopes that they may have some creative ideas for Jeff.

CLECs Propose to Build Fiber Optic Network with AT&T

It's hard to even imagine that headline, except perhaps on TheOnion.com or TheSmokingGun.com.  But one of the themes running through this blog is that there are many business and legal paths to the goal of broadband ubiquity, and the way we do things here in the U.S. is neither the only, nor necessarily the best, way to achieve that goal.  Where am I going with this thought?

Well, yesterday Reuters carried an article discussing a proposal by Australian competitive carriers to build a fiber optic network jointly with with Telstra, the Australian incumbent wireline carrier.  According to the article:

     Rivals of Australia's Telstra Corp. Ltd. . . . outlined a bold plan to team up with the top phone company to build a A$3 billion ($2.2 billion) high-speed network.

    Telstra, which is planning to build its own A$3 billion high-speed network, dismissed the proposal as a "self-serving stunt" saying they could easily build their own network.

    The consortium said it was determined to win approval for the shared network, which it said would give all parties equal access to the infrastructure. Company officials said they would seek government backing and intervention from the competition regulator if necessary.

    "Any proposal from industry that seeks to promote both investment, improved services and competition is welcome," said Ed Willett, a commissioner with the regulator, told Reuters.

    Telstra is close to reaching an agreement with the competition regulator over rules governing rivals' access to the network it wants to build.

    The alternate plan comes just weeks ahead of an expected decision by the government on whether to sell its A$24 billion stake in Telstra with regulatory certainty considered key to that decision.

    The consortium of seven telecommunications companies, including SingTel's (STEL.SI: Quote, Profile, Research) Optus, says the network it wants to build would reach 30-50 percent more than the four million homes and businesses Telstra says its network would reach.

    "The price of wholesale access would be determined up front and with certainty so all parties and investors will know the return on their investment," Paul O'Sullivan, chief executive of Optus, told a media and analysts' briefing.

    "All retail telcos including Telstra would pay the same access price to use the new fibre-to-the-node network. That way we would all be on a level playing field."

    Telstra spokeswoman Liz Jurman said the consortium had not even approached the top phone company over the plan.

    "Together these companies are bigger than Telstra so they could easily build their own private network," Jurman said.

    O'Sullivan said details on how much would be invested by each of the parties and how the network would be built had yet to be decided but it was looking at four models including one where Australia would be divided into geographic areas with Telstra responsible for upgrading some of these areas.

    Other companies behind the plan are: Internode, Macquarie Telecom, PowerTel (PWT.AX: Quote, Profile, Research), Primus (PRTL.O: Quote, Profile, Research), Soul and TransACT. . . .

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I'm no expert in Australian telecom regulatory politics.  This may well be nothing more than a stunt designed to give the competitors more leverage in negotiating for cheaper equal access to the Telstra network.  If they did build a single network that was open to all carriers on an equal access basis, however, it would be a fascinating experiment.  One thing is certain - they would avoid most of the net neutrality battles that are beginning to consume the U.S. telecom space.

EU's Proposed Rules for New Media Come Under Fire

The debate is ongoing in the U.S. over how and to what extent the rules that apply to traditional print and broadcast media should apply to new broadband networks.  The questions were answered, at least in part, for network owners and webhosters when Section 230 of the CDMA was enacted in the '90's and they were given common carrier immunity in most cases.  Attempts to apply other regulations on broadband networks have been slowed by the inapplicability of the resource "scarcity" rationale that underlies much of the (non-pornography-related) regulation of traditional electronic media and the correspondingly stronger First Amendment interests.  As a result, the rules and the potential liability of the new media - individuals and entities that distribute their product/content over networks that they neither own nor lease - are now being hammered out largely in piecemeal litigation.

The  EU seems to be taking a different tack.  Several publications had articles last week about the negative reaction of Internet and content companies to the proposed new EU regulations.  The EU would apply to the new broadband media most of the restrictions that apply to the "old media," including those limiting hate speech, advertising, and the type of material shown to children.

Technology Review had a good summary of the reaction:

Media and technology companies are warning that proposed European Union broadcasting rules would restrict the growth of emerging media formats such as video broadcasts on the Internet and mobile phones.

On Tuesday, an alliance of British-based companies -- including ITV PLC, Yahoo Inc., Vodafone Group PLC, Intel Corp. and Cisco Systems Inc.'s UK subsidiary -- said a European Commission proposal to impose rules for traditional broadcasters on new media providers could have ''unintended consequences'' and hurt investment.

The European Commission wants to create a level playing field by making TV and TV-like services -- such as broadcasts over high speed broadband and third-generation mobile phones -- follow the same set of rules. Those rules include limits on hate speech, advertising and the kind of content that can be broadcast to children. . . .

The EU proposal could ultimately mean less investment for an area that has enormous growth potential -- leading to fewer companies, less innovation and higher prices, the group said in a statement.

''Many services unconnected to scheduled broadcast television will be unintentionally caught,'' it said.

''Citizen media such as blogs, video-casts and the like are one of the most exciting developments enabled by new technology. This phenomenon has the potential to create new businesses ... but this proposed regulation severely risks stunting its growth,'' it said.

EU officials were not immediately available Tuesday to respond to the criticism, but the European Commission has insisted that it has no plans to regulate the Internet.

The European Internet Services Providers Association also is concerned about the ''lack of clarity'' in the EU draft law and is unsure what kind of technologies would be governed by the stricter rules, said Richard Nash, the association's secretary general. . . .

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It's not clear whether the proposed EU law will go into effect.  It must be approved by the European Parliament and 25 EU governments.

European Wireless Net Neutrality and a U.S. Third Pipe

eWeek.com's GoogleWatch column had an interesting bit last week about net neutrality in the European wireless industry:

"European cell phone giant Vodafone Group is using a new, more powerful content filter, which may be cause for alarm for Google.

What Vodafone's rolling out now in theory lets it collect from Google the same kind of user fee recently proposed by U.S. wired broadband network owners. These companies argue that Google's such a heavily used feature, it's choking off their bandwidth. So Google should pay them something, perhaps based on how much of the pipe its customers take up.

The new wrinkle here is Vodafone is a cell phone operator, a type of business rarely heard from on this issue of Net neutrality. . . . So just how Vodafone will behave going forward is somewhat uncharted and very interesting territory.

Vodafone says it'll never use the filters to charge Google or others fees, and to think so is reading too much into the situation. The firm is simply using the filters to block kids from seeing porn and other illicit material. . . ."

Is what's sauce for the goose sauce for the gander? (I had to check the exact wording of that aphorism; instead of getting up to pull my Bartlett's off the bookshelf, I simply googled "goose sauce gander.")  If recent reports are accurate, Google may have the opportunity to decide if it wants to practice what it preaches.  Investor's Business Daily had a good piece about the possibility of Google, EarthLink, eBay and other "new media" companies building their own broadband wireless networks.  This is the type of third pipe that might go a long way towards providing a business solution to the network neutrality dilemma. Preston Gralla at Techwire had a couple of entries on his blog (here and here) talking about the same topic.  He's a big supporter of the idea. 

 

ENUM Coming to the U.S. PSTN

The FCC recently asked for comments on a petition by Country Code 1 ENUM  LLC to obtain North American Numbering Plan numbering resources, i.e. PSTN phone numbers, for testing of an ENUM system.   (Depending on your view, ENUM is short for either E164 Number Mapping or tElephone Number Mapping.)  Country Code 1 is a consortium organized "to build the public infrastructure that will promote the development of ENUM technology in a single, carrier-class manner within the [NANP] countries" (which include the United States, Canada and the Caribbean nations).

PSTN phone numbers arenormally only given to telecom carriers, which Country Code 1 is not.  This petition may be the camel's nose under the PSTN tent.  It directly implicates the issue of control of the database or databases that facilitate contact among the members of a network or group of networks. Customers may contact people or businesses in a variety of ways: by dialing their PSTN phone number, by typing their e-mail address in an e-mail program, or by clicking on their instant messaging name. Each of these identifiers is connected through a database—the PSTN numbering system, the domain name registry, and the IM presence database. Today, these databases are controlled by different entities, and control of the database is a an important competitive factor.

In the future, all of these may be unified through ENUM. ENUM employs a system for routing that is similar to the domain name system used for Web addresses. It allocates a single identifier, consisting of both letters and numbers, that can then be used for multiple IP services, such as VoIP, e-mail, and instant messaging. In an ENUM environment, if you enter a PSTN phone number into your cellphone or an e-mail address into your computer, the ENUM software can map that number or e-mail address to the ENUM identifier and deliver information about all the possible ways to contact the owner of that number or e-mail address. The caller can then choose one of those connections and be charged appropriately.

The beauty, and the threat, of ENUM is that it minimizes the importance of a PSTN phone number by making it simply one option to be used in contacting a party. It allows that phone number or an IM screen name or an email address to be used to route a call, e-mail, or instant message on a network other than the PSTN. When combined with relatively simple least cost routing software, ENUM implementation that is not controlled by incumbents will inevitably hasten the ongoing decline of PSTN revenues, particularly the incumbents’ above cost charges for termination of voice calls.

Telecom/High Tech Lobbying Expenditures

I just came across a fascinating chart listing the lobbying expenditures for a variety of telecom, ISP, and high tech firms between 1998 and 2004.  It also identifies the key issues each firm lobbied on, ranging from broadband and VoIP legislation, wireless regulation. CALEA requirements and implementation deadlines, and e-government issues to stock option accounting reform.  The biggest spenders were AT&T (the old one), Verizon, Microsoft, and SBC, all in the $40-60 million range.  Many of the "new media" and "new economy" companies like Google, Electronic Arts and eBay barely registered on the chart.   I suspect that changed somewhat in 2005 and 2006, as the net neutrality and other content-ralated debates heated up, but they have an awful long way to go to match the financial muscle and lobbying clout of the incumbents.  The chart is here: Federal lobbying expenditures | CNET News.com.

 

Giving Broadband Away?

Two articles today brought home the fact that the U.S. broadband business model is just one of many possible approaches.  The first was from Fierce Wireless, which noted that:

Pure-play mobile operators like O2 and Vodafone in Europe are looking to enter the fixed broadband market through local loop unbundling options that allow them to attain and deploy DSL equipment. Vodafone's management restructuring last week included a new division headed by CTO Thomas Geitner that will focus on converged IP services and IMS and a centralized service delivery platform architecture, which it couldn't do if it was simply wholesaling a DSL provider's services. Reports circling the Internet claim that Alcatel has already made a pitch to Vodafone and other vendors may have, too. For more information on Europe's carriers entering the DSL market, check out this article from Light Reading.

The Financial Times had an article about the British cellular carrier Carphone Warehouse (I know, it sounds like a place you'd find just off Exit 2 of the Jersey Turnpike).  It seems they have decided to give wireline broadband to their cellular subscribers for free.  It's an interesting  business idea, but not one likely to be repeated in the U.S.