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S. Derek Turner

House Subcommittee Votes To Nullify Open Internet Order

in FCC/Net Neutrality by

WASHINGTON, March 9, 2011 – The Communications and Technology Subcommittee voted Wednesday in a 15-8 party-line vote to disapprove the new Federal Communications Committee net neutrality regulations.

Chairman Rep. Greg Walden (R-OR) presided over hearing Wednesday morning, which debated the open Internet regulations set by the FCC.  This was the committee’s second hearing on the topic after a four-hour session last month in which legislators put the five FCC Commissioners in the hot seat.

The legislation will now go back to the full Energy and Commerce Committee for consideration.

Representatives and witness, both for and against disapproval, argued that their way of regulating the Internet, whether heavy handed or free of authority, would lead to more innovation and jobs. Those in favor of the disapproval also questioned the statutory authority under the Telecommunications Act of the FCC to implement these regulations.

The vote to disapprove the FCC’s rules was held directly after the hearing. Subcommittee Chair Walden agreed to postpone the vote after Democrats insisted that issued a public request that an additional hearing take place to shed further light on the regulations set by the FCC.

Witnesses at the hearing included Tom DeReggi, President of RapidDSL & Wireless, Dr. Shane Greenstein, the Elinor and Wendell Hobbs Professor at Northwestern University, Dr. Anna-Maria Kovacs, an independent consultant and investment analyst, Mr. James Cicconi, Senior Executive Vice President for External and Legislative Affairs for AT&T, Robin Chase, founder and CEO of GoLoco and founder and former CEO of Zipcar, and S. Derek Turner, Research Director for Free Press. Chase flew in for the afternoon from Paris in order to give her testimony.

Together the witnesses represented Internet consumers, small business owners, Internet providers, as well as experts on the economics of Internet technology.  Most witnesses were in favor of maintaining the FCC’s regulations, with AT&T remaining largely neutral towards the FCC despite their desire for fewer regulations.

“Nearly everyone agrees that public policy ought to prevent gatekeepers from using market power to erect artificial barriers to speech and commerce,” stated Turner.

Turner also stated that consumers and small business owners alike were in favor of the FCC’s role as Internet watchdog, with some complaining that regulations did not go far enough. Free Press initially opposed the FCC’s order, arguing that it did not adequately preserve the Internet.

“While aspects of the rule may be flawed,” stated Turner, “Any attempt to repeal it leaves Internet users fundamentally unprotected.”

“I can confidently say that eliminating the FCC’s Network Neutrality rules will put future entrepreneurs and small businesses at a significant disadvantage, “ testified Chase. “If Congress decides to disable the FCC’s ability to enact policies that protect an open Internet, the Internet will become captured by the broadband Internet companies that provide access.”

Dr. Greenstein concluded his testimony in favor of FCC regulations, stating that history has “led us to favorable outlook for policies that tend towards continuity, namely, continued regulatory presence with occasional and consistent action.”

On the opposing side, Energy and Commerce Committee Chair, Rep. Fred Upton (R-MI), openly supported the resolution to nullify the FCC regulation.

“There is no crisis warranting intervention,” stated Upton in his opening statement. “The Internet is open and thriving precisely because we have refrained from regulating it.”

Rep. Anna Eshoo (D-CA), the Subcommittee’s ranking member, contradicted Upton’s assertion, however, and concluded the proceedings by citing incidences where broadband providers blocked service for companies that provided competing services, such as the 2007 lawsuit accusing Comcast of infringing regulations by blocking users from certain file sharing systems.

In her opening statement, Eshoo reiterated the view she claimed is held by most consumers and providers: that the FCC’s light regulations have not been found to be a menace to business.


AT&T Threatens to Stop Deploying U-Verse

in FCC/Net Neutrality by

WASHINGTON, June 16, 2010 – In response to FCC Chairmen Julius Genachowski’s Third Way proposal to institute a level of regulation on broadband AT&T has decided to “rethink” it’s spending on its high speed DSL service. AT&T’s U-Verse offers users television and internet to 24 million homes; with plans to add another 6million by the end of next year.

AT&T’s CEO Randall Stephenson said “If this Title 2 regulation looks imminent, we have to re-evaluate whether we put shovels in the ground,”

In response to this threat made by AT&T; Free Press, a media advocacy think tank, has claimed that this threat is meaningless.  S. Derek Turner, Free Press research director, said “AT&T has no credibility on investment, and this latest threat is further evidence of that. The company continues to cry wolf about investment to pressure the FCC into doing its bidding, while it fails to deliver on key promises. In 2002, the company (operating as SBC) promised the Commission that it would invest billions to deploy fiber-to-the-home technology if the FCC gave it specific deregulatory favors. AT&T got exactly what it wanted, but the company has yet to deliver on its investment promise. This latest threat is just more of the same.”

Appeals Court Deals Network Neutrality Blow to FCC

in FCC/National Broadband Plan/Net Neutrality by

WASHINGTON, April 6, 2010 – A federal appeals court ruled Tuesday that the Federal Communications Commission does not have the power to mandate that broadband provider Comcast must give equal treatment to Internet traffic streaming through its networks.

The ruling by the District of Columbia’s U.S. Court of Appeals is a huge victory for Comcast. The nation’s largest cable firm had challenged the FCC’s authority to impose network neutrality requirements on broadband companies.

The ruling also calls into question the FCC’s ability to implement parts of its recently released National Broadband Plan.

Comcast had challenged an FCC decision in 2008 forbidding the company from blocking its broadband subscribers from using BitTorrent, an online file-sharing technology.

In reaction to the court’s decision, Federal Communications Commission spokeswoman Jen Howard said the agency “is firmly committed to promoting an open Internet and to policies that will bring the enormous benefits of broadband to all Americans,” adding that the decision “invalidated the prior commission’s approach to preserving an open Internet. But the court in no way disagreed with the importance of preserving a free and open Internet; nor did it close the door to other methods for achieving this important end.”

Proponents of network neutrality were quick to slam the court’s decision.

Parul Desai, vice president of the Media Access Project, said: “I am disappointed in the court’s finding that the commission did not make the case for its authority to take action against Comcast’s blocking of BitTorrent….The commission must have the authority to protect all Internet users against harmful and anticompetitive conduct by Internet service providers.”

Executive Director Markham Erickson of the Open Internet Coalition agreed: “Today’s D.C. Circuit decision in Comcast creates a dangerous situation, one where the health and openness of the Internet is being held hostage by the behavior of the major telco and cable providers.”

Gigi Sohn, president and co-founder of Public Knowledge, said the court decision means there are “no protections in the law for consumers’ broadband services.”

S. Derek Turner, the research director for Free Press, said the decision forces the FCC into an “existential crisis, leaving the agency unable to protect consumers in the broadband marketplace, and unable to implement the National Broadband Plan.”

But Barbara Esbin, a senior fellow at The Progress & Freedom Foundation, applauded the decision, saying the FCC’s action against Comcast’s Internet network management practices was unlawful because Congress has not delegated to the FCC regulatory authority over the provision of Internet services.

Free State Foundation President Randolph May saw the ruling as a possible impetus for  Congress to begin a rewrite of the Communications Act “which ties the commission’s regulatory activity over broadband explicitly to evidentiary showings of abuse of substantial market power and demonstrable consumer harm.”

A comment from Comcast was not available by press time.

Verizon and Free Press Agree that Remote Broadband Requires Monopolies

in Broadband Stimulus by

January 22, 2009 – Verizon Communications and Free Press agreed that bringing high-speed internet technology to unserved areas of western Massachusetts may result in a monopoly, or a single local telecommunications provider.

In separate comments made last month in a state broadband inquiry, the telecommunications giant and the advocacy group both said that economic factors are likely to tilt toward a single broadband provider.

But they disagreed about whether Net neutrality or other open access rules should be imposed upon such a monopoly.

Verizon and Free Press were among 29 organizations that filed comments as part of the “call for solutions” to the problem of bringing broadband to the Berkshires and other areas of western Massachusetts.

Massachusetts is one of the leading states in the drive to promote universal broadband deployment and availability. In August 2008, Massachusetts Gov. Deval Patrick, a Democrat, signed legislation authorizing up to $40 million in state funds to ensure that broadband is available to all the state’s citizens.

The comments were released on the web site of the Massachusetts Broadband Institute, the non-profit entity that will administer the state’s investment in broadband infrastructure.

The comments also provide a window into the arguments that are being made – both in Washington and in the states – about who and how the nation should fund the provision of universal broadband deployment.

“Underlying economic market factors” make it likely that there will be “the establishment of a single broadband provider serving each community,” wrote S. Derek Turner, research director of Free Press, which is based in Northampton, Mass. Referring to the efforts of the Massachusetts Broadband Institute, he said, “That is, the project will result in the establishment of a monopoly.”

Verizon agreed. One of the country’s leading telecommunications companies, Verizon offers digital subscriber line (DSL) service in portions of western Massachusetts, and fiber-optic service in more populous eastern areas of the state.

“While the MBI should look to an array of technological solutions,” Verizon wrote, “its goals and objectives may best be met by the recognition that a single service provider may be the most sustainable business model in some areas.”

“Economies of scale and scope are important factors in today’s telecommunications marketplace,” continued the filing, signed by John Conroy, vice president of regulatory matters for Massachusetts. “Recognizing that a decision that incorporates a single service provider that is best suited to provide the solutions will benefit the Commonwealth.”

Neither Free Press nor Verizon regarded the prospect of a monopoly as a negative.

“Natural monopolies in telecommunications networks are common, and monopoly harms are easily avoided through the implementation of consumer protection policies,” said Turner of Free Press. Among those protections should be rules requiring Net neutrality and wholesale access to competitors.

Verizon urged caution on open access rules. “The economics associated with building and maintaining a broadband infrastructure change dramatically when multiple carriers are allowed to use the infrastructure,” the company said. “Should the MBI proceed with open access requirements, it is critical that specific and detailed terms of use, including pricing, be clear and unambiguous.”

Others companies and trade groups filing comments in the proceeding included AT&T, Alcatel-Lucent, Ciena, and the New England Cable and Telecommunications Association.

Among the non-profits weighing in were Berkshire Connect and Pioneer Valley Connect, which have been seeking to provide broadband connectivity in the four counties of western Massachusetts; and Five Colleges Inc., which discussed the 53-mile fiber ring that it built to connect the colleges of Amherst, Hampshire, Mount Holyoke, Smith and the University of Massachusetts at Amherst.

Massachusetts Broadband References

BroadbandCensus.com References

  • January 17, 2009 – Massachusetts Gov. Deval Patrick highlighted the significance of broadband in his “State of the Commonwealth” address on Thursday, January 15.
  • January 16, 2009 – House Appropriations Committee Seeks $6 Billion for Broadband, Would Impose Speed Requirements Upon Most Grant Recipients.
  • January 2, 2009 – Broadband Stimulus Package Should Include Funding for State Data, Says Massachusetts
  • August 4, 2008 – Governor Deval Patrick signed a bill allocating $40 million for the provision of broadband to unserved areas in Massachusetts.
  • Visit BroadbandCensus.com’s Broadband Wiki for a catalog of the various broadband-related stimulus proposals.
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