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The EU Strikes a Blow For Net Neutrality. And Against it.

Last Sep­tem­ber, the EU fleshed out its plans for a major tele­com reg­u­la­to­ry over­haul. The pack­age of pro­pos­als, cham­pi­oned by EU Dig­i­tal Agen­da com­mis­sion­er Neel­ie Kroes, includ­ed the very sig­nif­i­cant dec­la­ra­tion of an EU ded­i­ca­tion to pro­tect­ing net neu­tral­i­ty. From a dig­i­tal social jus­tice stand­point, net neu­tral­i­ty is a crit­i­cal right so the EU’s announced reform pack­age was, in many ways, some very good news:

Europe Lays Out Its Most Ambi­tious Reform Plan Yet: No More Roam­ing Pre­mi­ums, Enforced Net Neu­tral­i­ty, And More
Post­ed Sep 11, 2013 by Ingrid Lun­den

The Euro­pean Com­mis­sion has over the years been chip­ping away at how big car­ri­ers have milked Euro­pean con­sumers in areas like inter­na­tion­al call­ing charges and broad­band usage for cer­tain con­tent. Now, in a spir­it of get­ting the region of 28 dis­parate nations to behave as one, the reg­u­la­tors have tak­en their biggest swing of the bat yet: a new leg­isla­tive pack­age that pro­pos­es to cut out inter­na­tion­al call­ing pre­mi­ums and ser­vices that offer dif­fer­ent broad­band speeds depend­ing on the con­tent broad­cast; and on the car­ri­er side new rules that would effec­tive­ly cut down red take to make Europe into a sin­gle mar­ket.

The Com­mis­sion, which for­mal­ly laid out its inten­tions today but has been work­ing on them for a while, is call­ing the plan its most ambi­tious in 26 years. If it gets approved, it could have huge impli­ca­tions not just for con­sumers and their big car­ri­er over­lords, but also on new­er play­ers like OTT video providers and star­tups offer­ing net­worked ser­vices.

But whether the EC will ever man­age to get big car­ri­ers and coun­tries to agree to it will be anoth­er sto­ry. We’ve already seen lob­by­ists mak­ing pre-emp­tive attempts to scup­per the pro­pos­als, with Europe forg­ing ahead any­way. If approved, the first changes could start to take effect by July 2014.

“Fur­ther sub­stan­tial progress towards a Euro­pean sin­gle mar­ket for tele­coms is essen­tial for Europe’s strate­gic inter­ests and eco­nom­ic progress,” EC pres­i­dent Jose Manuel Bar­roso said in a speech today in Brus­sels, “for the tele­coms sec­tor itself and for cit­i­zens who are frus­trat­ed that they do not have full and fair access to inter­net and mobile ser­vices.”

VP Neel­ie Kroes, the Dig­i­tal Agen­da com­mis­sion­er who has long been argu­ing for these changes, was behind this new pack­age. “The leg­is­la­tion pro­posed today is great news for the future of mobile and inter­net in Europe,” she said in a state­ment. “The Euro­pean Com­mis­sion says no to roam­ing pre­mi­ums, yes to net neu­tral­i­ty, yes to invest­ment, yes to new jobs. Fix­ing the tele­coms sec­tor is no longer about this one sec­tor but about sup­port­ing the sus­tain­able devel­op­ment of all sec­tors.”

Right now, the EC esti­mates that tele­coms ser­vices account for 9% of Europe’s dig­i­tal econ­o­my “because all sec­tors increas­ing­ly depend on con­nec­tiv­i­ty to be glob­al­ly com­pet­i­tive and deliv­er ser­vices.” The idea is that by bring­ing down some of these exist­ing bar­ri­ers, that per­cent­age — and the econ­o­my — will grow. Despite many years of incre­men­tal reforms, “there is no tele­coms com­pa­ny that oper­ates across the whole EU, and both oper­a­tors and cus­tomers face dif­fer­ing prices and rules,” the Com­mis­sion not­ed in a state­ment today.

Here’s the run-down of some of the high­lights of the new pro­pos­als, with the lat­est draft of the pro­pos­als, and a sum­ma­ry, embed­ded below that.

Sin­gle set of rules for car­ri­ers to fol­low: Those who are rolling out ser­vices across all 28 mar­kets in Europe would need only a sin­gle autho­riza­tion rather than 28.

No more roam­ing pre­mi­ums on inbound calls: From July 2014, no more incom­ing call charges across the EU. Also car­ri­ers will either offer sin­gle Euro­pean price plans or the abil­i­ty to let con­sumers eas­i­ly select car­ri­ers that offer call­ing plans out­side a user’s home mar­ket. (Since 2012, car­ri­ers already have been forced to offer cheap­er prices for mobile data; this builds on that.)

No more roam­ing call charges out­bound: This applies to both mobile and fixed calls and would make the price of a call with­in the EU the same price as a call in your home coun­try. (Long dis­tance becomes the same price as local.)

Net neu­tral­i­ty: Mak­ing sure broad­band car­ri­ers are not short-chang­ing con­sumers over cer­tain con­tent by throt­tling speeds has been a long-argued issue in Europe and oth­er parts of the world. This is the EC’s attempt to right the issue once and for all here. Car­ri­ers will not be allowed to block or slow down deliv­ery of cer­tain con­tent; they will how­ev­er be allowed to offer dif­fer­ent kinds of ser­vices that allow for some stream­ing (such as data-inten­sive video) and not oth­ers. Users who feel they are get­ting short­changed can walk away with no penal­ties, or as the EC puts it, “the oblig­a­tion on providers to pro­vide unhin­dered con­nec­tion to all con­tent, appli­ca­tions or ser­vices being accessed by end-users – also referred to as Net Neu­tral­i­ty – while reg­u­lat­ing the use of traf­fic man­age­ment mea­sures by oper­a­tors in respect of gen­er­al inter­net access.”


The EU’s declared ded­i­ca­tion to net neu­tral­i­ty was great news back in Sep­tem­ber, but after the recent US appeals court rul­ing strik­ing down net neu­tral­i­ty in the US, a ded­i­ca­tion to net neu­tral­i­ty also becomes a busi­ness oppor­tu­ni­ty because if the US wants to turn itself into the land of inter­net inequal­i­ty there’s noth­ing stop­ping the EU from loud­ly point­ing this out. Of course, it helps if the EU’s ver­sion of net neu­tral­i­ty actu­al­ly results in net neu­tral­i­ty:

Can Europe real­ly offer star­tups a bet­ter deal on net neu­tral­i­ty?
By David Mey­er
Jan. 15, 2014 — 7:15 AM PST

Europe’s dig­i­tal chief is already claim­ing that “new­ly dis­ad­van­taged U.S. star­tups” should move across the Atlantic — but a sim­i­lar net neu­tral­i­ty dis­as­ter could still hap­pen in the EU, if key pro­pos­als aren’t tight­ened up.

As net neu­tral­i­ty goes down in flames state­side…

Neel­ie Kroes @NeelieKroesEU

Watch­ing US #net­neu­tral­i­ty news. Maybe I shd invite new­ly dis­ad­van­taged US star­tups to EU, so they have a fair chance http://online.wsj.com/news/articles/...
5:35 AM — 15 Jan 2014
Appeals court strikes down FCC’s net neu­tral­i­ty rules

A fed­er­al appeals court on Tues­day struck down the Fed­er­al Com­mu­ni­ca­tions Com­mis­sion’s open Inter­net rules on Tues­day, in a rul­ing that could give broad­band providers more room to charge con­tent...
Wall Street Jour­nal @WSJ
156 Retweets 54 favorites

Kroes, the Euro­pean Com­mis­sion­er in charge of the dig­i­tal econ­o­my, has a point. The poten­tial end of net neu­tral­i­ty rules is going to be real­ly bad for U.S. con­sumers and star­tups alike (as my col­league Stacey Hig­gin­both­am has not­ed, the likes of Google and Net­flix are actu­al­ly win­ners in this sce­nario, as they have deep pock­ets).

How­ev­er, some may dis­pute Kroes’s char­ac­ter­i­za­tion of Europe as a safe haven. The Com­mis­sion recent­ly adopt­ed pro­pos­als (that need to be rat­i­fied this year) that many see as falling short of promis­ing true net neu­tral­i­ty.


“Providers of con­tent, appli­ca­tions and ser­vices and providers of elec­tron­ic com­mu­ni­ca­tions to the pub­lic should there­fore be free to con­clude spe­cialised ser­vices agree­ments on defined lev­els of qual­i­ty of ser­vice as long as such agree­ments do not sub­stan­tial­ly impair the gen­er­al qual­i­ty of inter­net access ser­vices.”

In oth­er words, ISPs should be able to charge con­tent providers — offer­ing, say, IPTV or video­con­fer­enc­ing ser­vices — for join­ing a new fast lane, as long as the reg­u­lar inter­net doesn’t suf­fer. As net­work invest­ment would prob­a­bly grav­i­tate towards that fast lane, good luck with main­tain­ing the qual­i­ty of all the oth­er traf­fic over time.

One major point in Kroes’s favor is this: the Euro­pean broad­band scene is for the most part much more com­pet­i­tive than that in the U.S. – there are sim­ply more play­ers in most areas, mak­ing lock-in less of an issue. On top of that, anoth­er part of her tele­coms reforms would ensure that peo­ple can switch provider at no penal­ty if they think they’re not get­ting a good-enough ser­vice, so there would arguably be a good incen­tive to keep every­thing run­ning smooth­ly.

But that’s about con­sump­tion. On the sup­ply side, there’s still a good deal of scope in there for repli­ca­tion of the sce­nario the U.S. now faces, with big play­ers able to out­spend the min­nows and their pesky inno­va­tion, and buy their way into “free with the pack­age” promi­nence. The dev­il is in the details, and fans of com­pe­ti­tion will be hop­ing for the lan­guage of the EU pro­pos­als to be tight­ened up before they hit the Euro­pean Par­lia­ment for a vote.


So it appears that the EU’s tele­com over­haul might actu­al­ly pro­tect net neu­tral­i­ty. But it also might just end up incen­tiviz­ing tele­coms to no longer upgrade their low­er-cost data-infra­struc­ture since the pro­posed rules would only pre­vent com­pa­nies from offer­ing ser­vice pack­ages that would “sub­stan­tial­ly impair the gen­er­al qual­i­ty of inter­net access ser­vices”. Upgrad­ing and main­tain­ing the “gen­er­al qual­i­ty of inter­net access ser­vices” does­n’t appear to be a focus of the pro­posed leg­is­la­tion.

Net Neu­tral­i­ty or Busi­ness as Usu­al?
Still, as the above arti­cle points out, due to the high­ly frag­ment­ed EU tele­com mar­ket — where no EU-wide oli­gop­oly exists — mar­ket com­pe­ti­tion alone might enforce some degree of net neu­tral­i­ty even if the trou­bling loop­holes per­sist. Hope springs eter­nal! Unfor­tu­nate­ly, large play­ers in the EU tele­com mar­ket are already lob­by­ing for exact­ly that kind of large scale con­sol­i­da­tion. Large play­ers with hopes and dreams of their own. Large play­ers like Deutsche Telekom:

Bloomberg Busi­ness­week
Europe’s Tech Lag and A Leg Up From Snow­den
By Diane Brady Jan­u­ary 20, 2014

Deutsche Telekom’s new CEO and the man behind Angry Birds seem to agree on one thing: the scan­dal over U.S. spy­ing on allies could come at a cost to U.S. com­pa­nies. At the open­ing ses­sion of Munich’s DLD Con­fer­ence on Jan. 19, Rovio chief Peter Vester­bac­ka called it “the best mar­ket­ing cam­paign for Euro­pean com­pa­nies ever,” forc­ing busi­ness lead­ers to think twice about stor­ing sen­si­tive data in the U.S. For Tim­o­theus Höttges, who took over the top job at Deutsche Telekom a few weeks ago, the key is how they rebuild trust.

The depth of feel­ing around the issue sig­nals that Pres­i­dent Obama’s promise to rein in the Nation­al Secu­ri­ty Agency’s reach may not be suf­fi­cient to address allies’ con­cerns. As Paul-Bern­hard Kallen, a fel­low pan­elist and CEO of Hubert Bur­da Media, put it: “Every­body has been blam­ing Chi­na. What is now appar­ent is that it’s not the old friends who are the real friends.” Kallen, whose media com­pa­ny hosts the pre-Davos gath­er­ing, was also joined onstage by Lutz Schüler of Ger­man cable oper­a­tor Uni­ty­media Kabel.

Togeth­er, the four men debat­ed what it would take to accel­er­ate com­pe­ti­tion in the frag­ment­ed and high­ly reg­u­lat­ed Euro­pean mar­ket. Tele­com chief Höttges argued the first step is to ease up on rules, argu­ing that “we’re reg­u­lat­ed on what­ev­er we do.” Sec­ond, he wants an envi­ron­ment that allows him to charge suf­fi­cient rev­enues to make a prof­it. While U.S. and Euro­pean data traf­fic have both jumped 900 per­cent over the past five years, he said, that’s enabled U.S. tele­coms to grow annu­al rev­enues by rough­ly 35 per­cent while Euro­pean car­ri­ers’ have seen sales drop. The com­par­i­son with Asia is sim­i­lar. “There seems to be a dig­i­tal divide between Europe and the rest of the world,” said Höttges. With more than 200 car­ri­ers in Europe, vs. four in mar­kets like the U.S. or Chi­na, that may not be a sur­prise.

One of the biggest issues for the Euro­pean lead­ers was pref­er­en­tial treat­ment of for­eign play­ers. Unitymedia’s Schüler com­plained that Ger­many gave Net­flix access but struck down efforts to cre­ate a home­grown ver­sion through a part­ner­ship with ProSieben and RTL. “The change which has to hap­pen is dereg­u­la­tion,” he said. “There’s no dig­i­tal brand com­ing out of Ger­many …To the Googles of this world, Deutsche Telekom is a dwarf. We all need scale.”

Kallen agreed, talk­ing about the need for a lev­el play­ing field. A web­site that oper­ates out of Lux­em­bourg, for exam­ple, can sell e‑books into Ger­many at a neg­li­gi­ble rate while a local pro­duc­er has to charge a 19 per­cent sales tax. “My biggest con­cern is that the reg­u­la­to­ry envi­ron­ment isn’t fair to all the com­peti­tors,” he said.


Note that when Deutsche Telekom’s CEO says he wants “an envi­ron­ment that allows him to charge suf­fi­cient rev­enues to make a prof­it,” what he’s say­ing is “I want to get rid of net neu­tral­i­ty”.

Also note that when Deutsche Telekom’s CEO declares, “to the Googles of this world, Deutsche Telekom is a dwarf. We all need scale,” what he’s say­ing is the EU’s tele­com mar­ket needs to con­sol­i­date into an oli­gop­oly with Deutsche Telekom near the top. And based on cur­rent indus­try trends, mas­sive con­sol­i­da­tion of the EU tele­com sec­tor into an oli­gop­oly is prob­a­bly what we should expect:

The Wall Street Jour­nal
Europe Awaits Wave of Tele­com Con­sol­i­da­tion
Com­pa­nies, Bankers Eye Takeover Tar­gets; Tele­fóni­ca-KPN Deal a Lit­mus Test for EU

By Sam Schech­n­er and Eyk Hen­ning

July 28, 2013 9:37 p.m. ET

A ris­ing tide of deal mak­ing in Europe’s trou­bled tele­com sec­tor is spurring more com­pa­nies to dip their toes in the water, rais­ing hopes for a long-await­ed wave of con­sol­i­da­tion.

With Tele­fóni­ca SA’s agree­ment last week to buy the Ger­man mobile-phone unit of Dutch tele­com com­pa­ny Roy­al KPN NV in a deal worth €8.1 bil­lion ($10.6 bil­lion), the val­ue of Euro­pean merg­ers and acqui­si­tions in the tele­com sec­tor has hit a more than decade­long high. This comes on the back of cheap financ­ing, pos­si­ble reg­u­la­to­ry changes and exec­u­tives’ fear of being left behind.

Now, with the Ger­man mobile deal rep­re­sent­ing a key test of Euro­pean Union will­ing­ness to green light deals that reduce the num­ber of play­ers in a giv­en coun­try, bankers and telecom­mu­ni­ca­tions exec­u­tives say they are already look­ing at oth­er pos­si­ble takeover tar­gets.

“I think we are in the begin­ning of this process, of this cycle,” said Stéphane Richard, chief exec­u­tive of France’s Orange, on a con­fer­ence call to dis­cuss the com­pa­ny’s first-half results. “As far as Orange is con­cerned, we are pre­pared to play the max­i­mum role in this con­sol­i­da­tion move if it real­ly hap­pens.”

The fall­out could even­tu­al­ly be a deep—and exec­u­tives say overdue—shakeout in Europe’s patch­work tele­com indus­try. Across the EU, well over a hun­dred mobile and fixed oper­a­tors in 28 coun­tries are owned by over 40 major groups. That com­pares with just four big mobile oper­a­tors, and an increas­ing­ly con­sol­i­dat­ed cable busi­ness in the U.S.


Mar­ket con­di­tions are mak­ing con­sol­i­da­tion eas­i­er. Frag­men­ta­tion and com­pe­ti­tion have pushed down prof­its and share prices. Shares in Euro­pean tele­com com­pa­nies in the Stoxx 600 index have fall­en by more than 74% since Feb­ru­ary 2000. In that time the broad­er Stoxx 600 index has declined by only 22%.

Antitrust pol­i­cy at the EU’s exec­u­tive arm, the Euro­pean Com­mis­sion, and with­in some Euro­pean coun­tries has been an obsta­cle to in-coun­try con­sol­i­da­tion. In France, for instance, a fourth mobile oper­a­tor launched just last year, and the head of the coun­try’s antitrust watch­dog made clear in March that he would block any deal that reduced the num­ber of actors.

But that may be start­ing to change else­where. Last year, Brus­sels approved the takeover of an oper­a­tor in Aus­tria, bring­ing the mar­ket from four oper­a­tors to three—albeit with hefty con­di­tions.

Now anoth­er EU com­mis­sion­er, Neel­ie Kroes, is propos­ing new con­ti­nen­twide rules for the tele­com sec­tor that are aimed in part at encour­ag­ing cross-bor­der com­pe­ti­tion. The pro­pos­al, which is still being dis­cussed, “should sup­port the case for con­sol­i­da­tion,” ana­lysts from HSBC said in a recent note.

Tele­fóni­ca’s Ger­man deal would pro­vide per­haps the biggest test yet of the new wave. “If this deal goes ahead and gets val­i­dat­ed by Brus­sels, you give the green light to four-to-three deals in oth­er coun­tries,” said Fred­er­ic Boulan, a telecom­mu­ni­ca­tions ana­lyst at Nomu­ra Inter­na­tion­al PLC.

“We have too many play­ers in Europe,” Tele­fóni­ca Chief Oper­at­ing Offi­cer José María Alvarez-Pal­lete said last week on a con­fer­ence call to dis­cuss results. “Con­sol­i­da­tion is going to hap­pen.”


Snow­den Affair or Busi­ness As Usu­al?
We’ll clear­ly have to wait and see how much con­sol­i­da­tion is in store for the EU tele­com, but it’s obvi­ous that the EU tele­com mar­ket is fac­ing some major changes in com­ing years. Some of those changes will no doubt have been cat­alyzed by the Snow­den affair. But, busi­ness being what it is, a lot of those changes will also be dri­ven by busi­ness as usu­al:

NSA Scan­dal May Help Build Cyber-Bar­ri­ers
By Susan Craw­ford Dec 27, 2013 8:00 AM CT

The smooth flow of online com­mu­ni­ca­tion and com­merce between Europe and the U.S. is at risk of inter­rup­tion, thanks in part to naked oppor­tunism on the part of Euro­pean telecom­mu­ni­ca­tions giants. If the gov­ern­ments involved fail to keep online bar­ri­ers between the con­ti­nents low, the Internet’s poten­tial to be an engine of glob­al eco­nom­ic growth will be con­strained.

Take Deutsche Telekom AG (DTE) (DTE), the largest provider of high-speed Inter­net access and wire­less ser­vices in Ger­many and the largest telecom­mu­ni­ca­tions orga­ni­za­tion in the Euro­pean Union. To expand, the com­pa­ny will have to acquire addi­tion­al com­mu­ni­ca­tions com­pa­nies; in order to do so, it hopes to free itself from the Ger­man government’s 32 per­cent own­er­ship in the com­pa­ny. It has also expressed a desire to diver­si­fy into non-telecom­mu­ni­ca­tions lines of busi­ness, such as tech­ni­cal-ser­vices deliv­ery.

The snoop­ing scan­dal at the U.S. Nation­al Secu­ri­ty Agency may help Deutsche Telekom achieve both these goals. T‑Systems Inter­na­tion­al GmbH, the company’s 29,000-employee-strong dis­tri­b­u­tion arm for infor­ma­tion-tech­nol­o­gy solu­tions, has been los­ing mon­ey sell­ing sys­tems-inte­gra­tion and data-pro­cess­ing ser­vices. Now, in response to cus­tomers’ loss of trust in Amer­i­can ser­vices, Rein­hard Clemens, T‑Systems’ chief exec­u­tive offi­cer, says he wants to refo­cus the com­pa­ny on pro­vid­ing cloud ser­vices.

Deutsche Telekom has also pro­posed to help Europe avoid NSA sur­veil­lance by cre­at­ing “Schen­gen area rout­ing,” a net­work for the 26 Euro­pean coun­tries that have agreed to remove pass­port con­trols at their bor­ders. This net­work would sup­pos­ed­ly allow these nations to secure­ly exchange data among them­selves. Con­ve­nient­ly, the Schen­gen area does not include the U.K., which is now known to be close­ly coop­er­at­ing with the NSA.

Deutsche Telekom undoubt­ed­ly thinks that it will be able to col­lect fees from net­work oper­a­tors in oth­er coun­tries that want their cus­tomers’ data to reach Deutsche Telekom’s cus­tomers — and that the com­pa­ny has the mar­ket pow­er to raise those tolls ever high­er. As things stand, net­works already try to avoid Deutsche Telekom’s wires when rout­ing Inter­net traf­fic to Ger­man cus­tomers because the com­pa­ny refus­es to swap traf­fic on a no-pay­ment basis — the com­mon prac­tice of com­pet­i­tive car­ri­ers around the world.

With hun­dreds of lob­by­ists in Berlin, Deutsche Telekom can see to it that if any Ger­man leg­is­la­tor is asked what to do about the NSA prob­lem, he or she will respond with “Secure rout­ing of traf­fic.” Sure­ly this secure Schen­gen area rout­ing would be even smoother if Deutsche Telekom owned more of the telecom­mu­ni­ca­tions oper­a­tors involved.

Mean­while, Euro­pean tele­com reg­u­la­tors, anx­ious to help Euro­pean com­pa­nies avoid the risk of being bought up by Ver­i­zon Com­mu­ni­ca­tions Inc., AT&T Inc. or Car­los Slim, the Mex­i­can wire­less monop­o­list, are encour­ag­ing con­sol­i­da­tion — with Deutsche Telekom’s full sup­port. “Now is the right time” for con­sol­i­da­tion, Deutsche Telekom Chief Exec­u­tive Offi­cer Rene Ober­mann said in Novem­ber.

Reg­u­la­tors are being told by the telecom­mu­ni­ca­tions incum­bents that Euro­pean com­mu­ni­ca­tions will be more secure when few­er oper­a­tors can work togeth­er to raise elec­tron­ic bar­ri­ers at the bor­ders.


The more things change the more they stay the same it seems. Still, changes of some sort appear to be on the way for the inter­net as we know it and it remains very unclear what shape the tele­com over­haul will final­ly take this year. So stay tuned EU inter­net users! Although it might take years of indus­try con­sol­i­da­tion to dis­cov­er the real fate of net neu­tral­i­ty in the EU so you may not want to stayed tuned via online stream­ing ser­vices. That could get expen­sive.


10 comments for “The EU Strikes a Blow For Net Neutrality. And Against it.”

  1. What’s that? The Com­cast-Time Warn­er Cable merg­er may height­en calls for net neu­tral­i­ty? Uh, yeah, let’s hope so:

    The Los Ange­les Times
    Com­cast-Time Warn­er Cable deal may height­en calls for net neu­tral­i­ty

    By Dawn C. Chmielews­ki This post has been updat­ed as indi­cat­ed below

    Feb­ru­ary 13, 2014, 3:28 p.m.

    Com­cast Corp.‘s $45.2‑billion bid to acquire Time Warn­er Cable would expand the reach of the nation’s largest res­i­den­tial Inter­net provider into one-third of Amer­i­ca’s broad­band house­holds.

    The dig­i­tal land-grab is like­ly to serve as a ral­ly­ing cry for those who advo­cate gov­ern­ment reg­u­la­tion over broad­band providers.


    The U.S. Court of Appeals in Wash­ing­ton struck down the FCC’s net neu­tral­i­ty rules ear­li­er this year, in a case brought by Ver­i­zon Com­mu­ni­ca­tions Inc. The rul­ing would allow Inter­net providers to impose fees on com­pa­nies like Net­flix to give pri­or­i­ty treat­ment to the movies and TV shows it streams across its net­work.

    Com­cast agreed to abide by the prin­ci­ple of net neu­tral­i­ty — mean­ing, it would treat all online traf­fic equal­ly and not give pref­er­en­tial treat­ment to its own video — as a con­di­tion of its 2011 acqui­si­tion of NBCU­ni­ver­sal.

    The con­sent decree, which is designed to pro­tect com­pe­ti­tion, extends through the end of 2017. Time Warn­er Cable would also be sub­ject to these same terms, if the merg­er is con­sum­mat­ed.

    NScreen­Media founder Col­in Dixon said Com­cast has found a way to give its online movie and TV stream­ing ser­vice, Xfin­i­ty StreamPix, a com­pet­i­tive edge over rivals like Net­flix. The ser­vice, which costs $5 a month, is not sub­ject to the data-use lim­its Com­cast impos­es on its high-speed Inter­net cus­tomers.

    “This is Com­cast pre­fer­ring its video ser­vice on broad­band over oth­er video ser­vices,” Dixon said. “That itself could well make reg­u­la­tors start look­ing at this much, much more close­ly.”

    Updat­ed at 4:42 p.m.:

    Com­cast Exec­u­tive Vice Pres­i­dent David Cohen said Com­cast is exper­i­ment­ing with data-use thresh­olds in mar­kets includ­ing Chat­tanooga, Tenn., and in Atlanta. Ser­vices that sub­scribers access via the Inter­net – includ­ing Net­flix and Hulu, a stream­ing TV ser­vice that is one-third owned by Comcast’s NBCU­ni­ver­sal group, are count­ed against this cap. But StreamPix taps into Comcast’s pri­vate net­work, and doesn’t run the meter.

    “We’re not dis­crim­i­nat­ing against ser­vices we don’t own,” Cohen said. “Because many of the ser­vices we do own also count against the data usage thresh­olds.”

    Net­flix Chief Exec­u­tive Reed Hast­ings talked about the impor­tance of pre­serv­ing net neu­tral­i­ty dur­ing the com­pa­ny’s fourth-quar­ter earn­ings call last month with investors.

    “A domes­tic [Inter­net Ser­vice Provider] now can legal­ly impede the video streams that mem­bers request from Net­flix, degrad­ing the expe­ri­ence,” Hast­ings wrote in a mes­sage to investors. “The moti­va­tion could help get Net­flix to pay fees to stop this degra­da­tion. Were this dra­con­ian sce­nario to unfold ... we would vig­or­ous­ly protest.”

    James McQuiv­ey, a dig­i­tal media ana­lyst with For­rester Research, doubts Com­cast would “throt­tle” or slow the stream­ing of online video from sub­scrip­tion ser­vices like Net­flix — espe­cial­ly as it faces height­ened reg­u­la­to­ry scruti­ny.

    But the Com­cast-Time Warn­er Cable merg­er would sig­nal a dif­fer­ent com­pet­i­tive threat.

    “Com­cast has ambi­tions that reach beyond its foot­print, like­ly beyond the Time Warn­er Cable foot­print as well,” McQuiv­ey said. “Mean­ing that Com­cast will even­tu­al­ly invest in its StreamPix stream­ing ser­vice to be a direct Net­flix com­peti­tor.”


    “We’re not dis­crim­i­nat­ing against ser­vices we don’t own...Because many of the ser­vices we do own also count against the data usage thresh­olds.” That’s a phrase that Amer­i­cans are prob­a­bly going to be hear­ing from media exec­u­tives with increas­ing fre­quen­cy going for­ward.

    So should EU res­i­dents also begin fear­ing this phrase too? After all, the threat to US net neu­tral­i­ty cre­at­ed by the pre­ferred treat­ment Com­cast gives its StreamPix ser­vice sounds rather sim­i­lar to the warn­ings issued after the EU’s pro­posed changes. But if yes­ter­day’s vote on net neu­tral­i­ty in the EU’s Civ­il Lib­er­ties, Jus­tice and Home Affairs (LIBE) Com­mit­tee is indica­tive of what to expect, many of those trou­bling loop­holes in the EU’s pro­posed over­haul might be clos­ing:

    Fourth vote on the tele­com sin­gle mar­ket: a strong call for net neu­tral­i­ty in Europe
    5:18pm | 13 Feb­ru­ary 2014 |
    by Rae­gan Mac­Don­ald, Estelle Masse, Jon Fox

    Yes­ter­day, the Civ­il Lib­er­ties, Jus­tice and Home Affairs (LIBE) Com­mit­tee of the Euro­pean Par­lia­ment vot­ed on Dig­i­tal Agen­da Com­mis­sion­er Neel­ie Kroes’ Tele­com Sin­gle Mar­ket pro­pos­al. The ini­tial pro­pos­al from the Euro­pean Com­mis­sion includ­ed pro­vi­sions that put net­work neu­tral­i­ty at risk across Europe. Access wel­comes yes­ter­day’s vote in the LIBE Com­mit­tee, which addressed sev­er­al of the prob­lem­at­ic pro­vi­sions and proved its com­mit­ment to pro­tect­ing the inter­net as a plat­form for free expres­sion and inno­va­tion.

    The LIBE Com­mit­tee adopt­ed a def­i­n­i­tion of “spe­cialised ser­vices” that pre­vent new forms of dis­crim­i­na­tion online by ensur­ing that such ser­vices will not lead to the cre­ation of a two-tiered inter­net. LIBE reject­ed the orig­i­nal pro­pos­al by the Euro­pean Com­mis­sion which would enable telecom­mu­ni­ca­tion com­pa­nies to cre­ate arbi­trary tolls lim­it­ing access to inter­net ser­vices. In prac­ti­cal terms, this would cre­ate a “fast lane” for a few priv­i­leged inter­net ser­vices, while oth­er con­tent and ser­vices are left to lan­guish in the “slow lane”. More­over, mem­bers of the LIBE Com­mit­tee blocked Inter­net Ser­vices Providers (ISPs) from lim­it­ing con­nec­tion speeds, qual­i­ty of ser­vice, as well as block­ing online appli­ca­tions and ser­vices.

    The LIBE Com­mit­tee also put for­ward a pro­pos­al that brings greater legal clar­i­ty to users by chang­ing the word “free­dom” to “rights”. The “free­dom” to choose among ser­vices would enable ISPs to offer a wide vari­ety of con­fus­ing ser­vices that ulti­mate­ly do lit­tle to pro­tect user rights online. This minor change in word­ing sig­nif­i­cant­ly rais­es the lev­el of pro­tec­tion for users’ rights. Last but not least, fol­low­ing the exam­ple of the Cul­ture and Edu­ca­tion Com­mit­tee (CULT), LIBE intro­duced an excel­lent def­i­n­i­tion of prin­ci­ple of net neu­tral­i­ty being described as the “key dri­ver of the unprece­dent­ed inno­va­tion and eco­nom­ic activ­i­ty in the dig­i­tal age”.

    Regret­tably, the text adopt­ed by the LIBE Com­mit­tee leaves two harm­ful loop­holes in breach of the E.U. Char­ter of Fun­da­men­tal Rights and the Treaty of the Euro­pean Union. First, the pro­pos­al allows the use of traf­fic man­age­ment mea­sures, such as throt­tling, for nation­al secu­ri­ty pur­pos­es which are out­side of the scope of com­pe­tence of the Euro­pean Union. Sec­ond, the pro­pos­al empow­ers ISPs to con­duct law enforce­ment activ­i­ties on their own ini­tia­tive out­side the rule of law.

    Final obsta­cles to net neu­tral­i­ty in the Euro­pean Par­lia­ment

    Four of the five Euro­pean Parliament’s Com­mit­tees tasked with amend­ing the Commission’s pro­pos­al have now vot­ed. These four votes, meant to advise the lead Indus­try, Research and Ener­gy (ITRE) Com­mit­tee as it make its final deci­sion lat­er this month, were broad­ly sup­port­ive of net neu­tral­i­ty. How­ev­er, as of now, it is unclear which direc­tion the ITRE Com­mit­tee is lean­ing towards in regards to defend­ing net­work neu­tral­i­ty in Europe.

    ITRE’s draft report pre­pared by the con­ser­v­a­tive Mem­ber of the Euro­pean Par­lia­ment, Pilar del Castil­lo Vera, includes pro­vi­sions that would empow­er telecom­mu­ni­ca­tions com­pa­nies to engage in dis­crim­i­na­to­ry prac­tices online. Access, togeth­er with EDRi, pro­vid­ed an analy­sis of the ITRE draft report high­light­ing pro­vi­sions that would under­mine users’ online rights. Inter­est­ing­ly, the text adopt­ed yes­ter­day in the LIBE Com­mit­tee was led by a fel­low con­ser­v­a­tive par­ty mem­ber, MEP Sal­vador Sedó i Alabart, who has worked con­struc­tive­ly to put for­ward pro­vi­sions that would guar­an­tee an open inter­net across Europe.

    It is clear that Ms. Del Castil­lo’s rec­om­men­da­tions on the future of the open inter­net dif­fer from those pro­posed by many oth­er mem­bers of the Euro­pean Par­lia­ment, includ­ing those of her own par­ty. The Euro­pean Peo­ple’s Par­ty, Ms. Del Castil­lo’s own polit­i­cal par­ty, has made strong calls for the adop­tion of net neu­tral­i­ty prin­ci­ples into E.U. law (see here and here). It is then unclear whose inter­ests Ms. Del Castil­lo is rep­re­sent­ing, the public’s or tele­com’s.


    So it’s look­ing like net neu­tral­i­ty is prob­a­bly going the way of the white rhi­no in the US but it could still hang on in the EU. So not all of the net neu­tral­i­ty news these days is omi­nous, espe­cial­ly the news com­ing out of the EU...although that part about the EU ISPs get­ting the pow­er to con­duct law enforce­ment activ­i­ties on their own ini­tia­tive out­side the rule of law sound­ed kind of omi­nous.

    Posted by Pterrafractyl | February 13, 2014, 10:49 pm
  2. The poten­tial merg­er of Com­cast and Time Warn­er is under­stand­ably rais­ing quite a few ques­tions about the impact the cre­ation of such a mas­sive a tele­com behe­moth could have on US con­sumers. Anoth­er ques­tion raised by this merg­er: what’s going hap­pens to the tele­com sec­tor employ­ees when their indus­try gets even clos­er to becom­ing a monop­oly?

    The Tech­to­pus: How Sil­i­con Valley’s most cel­e­brat­ed CEOs con­spired to dri­ve down 100,000 tech engi­neers’ wages

    By Mark Ames
    On Jan­u­ary 23, 2014

    In ear­ly 2005, as demand for Sil­i­con Val­ley engi­neers began boom­ing, Apple’s Steve Jobs sealed a secret and ille­gal pact with Google’s Eric Schmidt to arti­fi­cial­ly push their work­ers wages low­er by agree­ing not to recruit each other’s employ­ees, shar­ing wage scale infor­ma­tion, and pun­ish­ing vio­la­tors. On Feb­ru­ary 27, 2005, Bill Camp­bell, a mem­ber of Apple’s board of direc­tors and senior advi­sor to Google, emailed Jobs to con­firm that Eric Schmidt “got direct­ly involved and firm­ly stopped all efforts to recruit any­one from Apple.”

    Lat­er that year, Schmidt instruct­ed his Sr VP for Busi­ness Oper­a­tion Shona Brown to keep the pact a secret and only share infor­ma­tion “ver­bal­ly, since I don’t want to cre­ate a paper trail over which we can be sued lat­er?”

    These secret con­ver­sa­tions and agree­ments between some of the biggest names in Sil­i­con Val­ley were first exposed in a Depart­ment of Jus­tice antitrust inves­ti­ga­tion launched by the Oba­ma Admin­is­tra­tion in 2010. That DOJ suit became the basis of a class action law­suit filed on behalf of over 100,000 tech employ­ees whose wages were arti­fi­cial­ly low­ered — an esti­mat­ed $9 bil­lion effec­tive­ly stolen by the high-fly­ing com­pa­nies from their work­ers to pad com­pa­ny earn­ings — in the sec­ond half of the 2000s. Last week, the 9th Cir­cuit Court of Appeals denied attempts by Apple, Google, Intel, and Adobe to have the law­suit tossed, and gave final approval for the class action suit to go for­ward. A jury tri­al date has been set for May 27 in San Jose, before US Dis­trict Court judge Lucy Koh, who presided over the Sam­sung-Apple patent suit.

    In a relat­ed but sep­a­rate inves­ti­ga­tion and ongo­ing suit, eBay and its for­mer CEO Meg Whit­man, now CEO of HP, are being sued by both the fed­er­al gov­ern­ment and the state of Cal­i­for­nia for arrang­ing a sim­i­lar, secret wage-theft agree­ment with Intu­it (and pos­si­bly Google as well) dur­ing the same peri­od.

    The secret wage-theft agree­ments between Apple, Google, Intel, Adobe, Intu­it, and Pixar (now owned by Dis­ney) are described in court papers obtained by Pan­do­Dai­ly as “an over­ar­ch­ing con­spir­a­cy” in vio­la­tion of the Sher­man Antitrust Act and the Clay­ton Antitrust Act, and at times it reads like some­thing lift­ed straight out of the rob­ber baron era that pro­duced those laws. Today’s inequal­i­ty cri­sis is America’s worst on record since sta­tis­tics were first record­ed a hun­dred years ago — the only com­par­i­son would be to the era of the rail­road tycoons in the late 19th cen­tu­ry.

    Short­ly after seal­ing the pact with Google, Jobs strong-armed Adobe into join­ing after he com­plained to CEO Bruce Chizen that Adobe was recruit­ing Apple’s employ­ees. Chizen sheep­ish­ly respond­ed that he thought only a small class of employ­ees were off-lim­its:

    I thought we agreed not to recruit any senior lev­el employ­ees…. I would pro­pose we keep it that way. Open to dis­cuss. It would be good to agree.

    Jobs respond­ed by threat­en­ing war:

    OK, I’ll tell our recruiters they are free to approach any Adobe employ­ee who is not a Sr. Direc­tor or VP. Am I under­stand­ing your posi­tion cor­rect­ly?

    Adobe’s Chizen imme­di­ate­ly backed down:

    I’d rather agree NOT to active­ly solic­it any employ­ee from either company…..If you are in agree­ment, I will let my folks know.

    The next day, Chizen let his folks — Adobe’s VP of Human Resources — know that “we are not to solic­it ANY Apple employ­ees, and visa ver­sa.” Chizen was wor­ried that if he didn’t agree, Jobs would make Adobe pay:

    if I tell Steve [Jobs] it’s open sea­son (oth­er than senior man­agers), he will delib­er­ate­ly poach Adobe just to prove a point. Know­ing Steve, he will go after some of our top Mac talent…and he will do it in a way in which they will be enticed to come (extra­or­di­nary pack­ages and Steve woo­ing).

    Indeed Jobs even threat­ened war against Google ear­ly 2005 before their “gentlemen’s agree­ment,” telling Sergey Brin to back off recruit­ing Apple’s Safari team:

    if you [Brin] hire a sin­gle one of these peo­ple that means war.

    Brin imme­di­ate­ly advised Google’s Exec­u­tive Man­age­ment Team to halt all recruit­ing of Apple employ­ees until an agree­ment was dis­cussed.

    In the geopol­i­tics of Sil­i­con Val­ley tech pow­er, Adobe was no match for a cor­po­rate super­pow­er like Apple. Inequal­i­ty of the sort we’re expe­ri­enc­ing today affects every­one in ways we haven’t even thought of — whether it’s Jobs bul­ly­ing slight­ly less­er exec­u­tives into join­ing an ille­gal wage-theft pact, or the tens of thou­sands of work­ers whose wages were arti­fi­cial­ly low­ered, trans­ferred into high­er cor­po­rate earn­ings, and high­er com­pen­sa­tions for those already rich­est and most pow­er­ful to begin with.

    Over the next two years, as the tech indus­try entered anoth­er froth­ing bub­ble, the secret wage-theft pact which began with Apple, Google and Pixar expand­ed to include Intu­it and Intel. The secret agree­ments were based on rela­tion­ships, and those rela­tion­ships were forged in Sil­i­con Valley’s inces­tu­ous boards of direc­tors, which in the past has been rec­og­nized most­ly as a prob­lem for share­hold­ers and cor­po­rate gov­er­nance advo­cates, rather than for the tens of thou­sands of employ­ees whose wages and lives are vis­cer­al­ly affect­ed by their club­by back­room deals. Intel CEO Paul Otelli­ni joined Google’s board of direc­tors in 2004, a part-time gig that net­ted Otelli­ni $23 mil­lion in 2007, with tens of mil­lions more in Google stock options still in his name — which worked out to $464,000 per Google board event if you only count­ed the stock options Otelli­ni cashed out — dwarf­ing what Otelli­ni made off his Intel stock options, despite spend­ing most of his career with the com­pa­ny.

    Mean­while, Eric Schmidt served on Apple’s board of direc­tors until 2009, when a DoJ antitrust inves­ti­ga­tion pushed him to resign. Intuit’s chair­man at the time, Bill Camp­bell, also served on Apple’s board of direc­tors, and as offi­cial advi­sor — “con­sigliere” — to Google chief Eric Schmidt, until he resigned from Google in 2010. Camp­bell, a cel­e­brat­ed fig­ure (“a qua­si-reli­gious force for good in Sil­i­con Val­ley”) played a key behind-the-scenes role con­nect­ing the var­i­ous CEOs into the wage-theft pact. Steve Jobs, who took reg­u­lar Sun­day walks with Camp­bell near their Palo Alto homes, val­ued Camp­bell for his abil­i­ty “to get A and B work out of peo­ple,” gush­ing that the con­duit at the cen­ter of the $9 bil­lion wage theft suit, “loves peo­ple, and he loves grow­ing peo­ple.”


    Could sim­i­lar infor­mal agree­ments like this arise in the tele­com sec­tor? Could there already be one in place? It cer­tain­ly did­n’t sound like it was too hard for an indus­try giant like Apple to pres­sure small­er com­peti­tors to agree to secret wage sup­pres­sion. And, more gen­er­al­ly, what oth­er sec­tors of the econ­o­my might be expe­ri­enc­ing sim­i­lar wage scams as own­er­ship in Amer­i­ca con­tin­ues to con­cen­trate at the top?

    Posted by Pterrafractyl | February 15, 2014, 6:46 pm
  3. Some poten­tial­ly big news on the US net neu­tral­i­ty front, although its unclear if it’s good news: The FCC has decid­ed not to rein­state the net neu­tral­i­ty rules that were over­ruled last month. Instead, anti-com­pet­i­tive behav­ior will be dealt with on a case-by-case basis. So it’s sort of sounds like an indus­try-friend­ly ‘net neu­tral­i­ty-lite’:

    Ars Tech­ni­ca
    FCC won’t appeal Ver­i­zon rul­ing, will reg­u­late ’Net on “case-by-case basis”
    Wheel­er keeps “com­mon car­ri­er” threat on the table in case ISPs mis­be­have.

    by Jon Brod­kin — Feb 19 2014, 11:44am CST

    The Fed­er­al Com­mu­ni­ca­tions Com­mis­sion will not appeal a court rul­ing that over­turned the FCC’s anti-block­ing and anti-dis­crim­i­na­tion rules, Chair­man Tom Wheel­er announced today. Instead of try­ing to rein­state rules that pre­vent­ed Inter­net ser­vice providers from block­ing or dis­fa­vor­ing Web ser­vices such as Net­flix and YouTube, the Com­mis­sion will try to reg­u­late anti-com­pet­i­tive behav­ior on a “case-by-case basis.”

    Ver­i­zon suc­ceed­ed in over­turn­ing most of the Open Inter­net Order, the FCC’s net neu­tral­i­ty reg­u­la­tion, when its suit saw the US Court of Appeals for the Dis­trict of Colum­bia Cir­cuit strike down major por­tions of the reg­u­la­tion last month. The rul­ing left the FCC room to oper­ate, though. The com­mis­sion could rein­state its anti-block­ing and anti-dis­crim­i­na­tion rules if it reclas­si­fied Inter­net providers as telecom­mu­ni­ca­tions ser­vices gov­erned by Title II of the Com­mu­ni­ca­tions Act, also known as “com­mon car­ri­ers.”

    Essen­tial­ly, the rul­ing sug­gest­ed that the FCC under pre­vi­ous Chair­man Julius Gena­chows­ki screwed up the Open Inter­net Order by impos­ing com­mon car­riage rules on ISPs with­out declar­ing ISPs to be com­mon car­ri­ers. But the new chair­man, Wheel­er, does­n’t plan to reclas­si­fy broad­band. He not­ed that the court deci­sion affirmed the com­mis­sion’s belief that Sec­tion 706 of the Telecom­mu­ni­ca­tions Act of 1996 should “empow­er it to pro­mul­gate rules gov­ern­ing broad­band providers’ treat­ment of Inter­net traf­fic.”

    How­ev­er, rules jus­ti­fied by Sec­tion 706 can’t be iden­ti­cal to com­mon car­riage rules. Con­sumer advo­cates, includ­ing for­mer FCC Com­mis­sion­er Michael Copps, urged the com­mis­sion to reclas­si­fy broad­band providers, say­ing straight­for­ward rules are need­ed to pre­vent ISPs from dis­crim­i­nat­ing against ser­vices that com­pete against the ISP’s own video and voice offer­ings. For exam­ple, an Inter­net ser­vice provider like Ver­i­zon could either block traf­fic from Web ser­vices like Net­flix or degrade Net­flix traf­fic unless the video provider paid for a faster path to con­sumers. Ver­i­zon notably offers its own TV ser­vice.

    Wheel­er said he will “keep Title II author­i­ty on the table” and that it “remains a part of the Com­mu­ni­ca­tions Act, [and] the Com­mis­sion has the abil­i­ty to uti­lize it if war­rant­ed. Accord­ing­ly, the Commission’s dock­et on Title II author­i­ty remains open.” That seems to be a warn­ing to Inter­net providers that they will face reclas­si­fi­ca­tion if they mis­be­have.

    Because of the abil­i­ty to reg­u­late using Sec­tion 706 and the threat of reclas­si­fi­ca­tion, Wheel­er said, “The com­mis­sion will not ini­ti­ate any fur­ther judi­cial action in con­nec­tion with the Ver­i­zon deci­sion.” Sec­tion 706 says the com­mis­sion must encour­age deploy­ment of advanced telecom­mu­ni­ca­tions capa­bil­i­ty to all Amer­i­cans, and that to achieve the goal it can enact mea­sures that pro­mote com­pe­ti­tion and remove bar­ri­ers to infra­struc­ture invest­ment.

    Using Sec­tion 706 author­i­ty, Wheel­er said he will draft new rules. Here is the key pas­sage from Wheel­er’s writ­ten state­ment:

    I intend to ask my fel­low com­mis­sion­ers to:

    Enforce and enhance the trans­paren­cy rule. The Court of Appeals has affirmed the Open Inter­net Order’s trans­paren­cy rule, which requires that net­work oper­a­tors dis­close how they man­age Inter­net traf­fic. This is more sig­nif­i­cant than many peo­ple may real­ize. We should con­sid­er ways to make that rule even more effec­tive. For exam­ple, an explic­it pur­pose of the rule is to afford edge providers the tech­ni­cal infor­ma­tion they need to cre­ate and main­tain their prod­ucts and ser­vices as well as to assess the risks and ben­e­fits of embark­ing on new projects.
    Ful­fill the “no block­ing” goal. The DC Cir­cuit rec­og­nized the impor­tance of the Open Inter­net Order’s ban on block­ing Inter­net traf­fic, but ruled that the Com­mis­sion had not pro­vid­ed suf­fi­cient legal ratio­nale for its exis­tence. We will care­ful­ly con­sid­er how, con­sis­tent with the court opin­ion, we can ensure that edge providers are not unfair­ly blocked, explic­it­ly or implic­it­ly, from reach­ing con­sumers, as well as ensur­ing that con­sumers can con­tin­ue to access any law­ful con­tent and ser­vices they choose.
    Ful­fill the goals of the non-dis­crim­i­na­tion rule. We will care­ful­ly con­sid­er how Sec­tion 706 might be used to pro­tect and pro­mote an Open Inter­net con­sis­tent with the DC Circuit’s opin­ion and its ear­li­er affir­mance of our Data Roam­ing Order. Thus, we will con­sid­er (1) set­ting an enforce­able legal stan­dard that pro­vides guid­ance and pre­dictabil­i­ty to edge providers, con­sumers, and broad­band providers alike; (2) eval­u­at­ing on a case-by-case basis whether that stan­dard is met; and (3) iden­ti­fy­ing key behav­iors by broad­band providers that the Com­mis­sion would view with par­tic­u­lar skep­ti­cism.

    Wheel­er was appoint­ed by Pres­i­dent Oba­ma to lead the FCC last year. Pre­vi­ous­ly, he was a ven­ture cap­i­tal­ist and a lob­by­ist for the cable and wire­less indus­tries, hav­ing led both the Nation­al Cable & Telecom­mu­ni­ca­tions Asso­ci­a­tion (NCTA) and Cel­lu­lar Telecom­mu­ni­ca­tions and Inter­net Asso­ci­a­tion (CTIA).

    FCC could mod­el new rules on its data roam­ing pol­i­cy

    An FCC senior offi­cial who is famil­iar with Wheel­er’s think­ing dis­cussed the chair­man’s plans with reporters today. The offi­cial said Wheel­er instruct­ed his staff to draft a pro­pos­al that ful­fills nondis­crim­i­na­tion goals and that there could be some­thing for the Com­mis­sion to vote on in a few months.

    New rules for home broad­band might estab­lish a min­i­mum lev­el of ser­vice that ISPs must fur­nish to “edge providers,” com­pa­nies like Net­flix that pro­vide Web ser­vices to home and busi­ness Inter­net users. The FCC offi­cial said the court rul­ing sug­gest­ed that the FCC might be able to cre­ate a no-block­ing rule that requires a min­i­mum lev­el of ser­vice. But when asked whether Wheel­er will pro­pose a no-block­ing rule using its Sec­tion 706 author­i­ty, the offi­cial said it’s too ear­ly to say because the new rules haven’t been writ­ten.

    While the offi­cial did­n’t spec­i­fy exact­ly how the new rules will achieve the no-block­ing and no-dis­crim­i­na­tion goals, he said they may be sim­i­lar to the FCC’s data roam­ing require­ments, which Ver­i­zon Wire­less unsuc­cess­ful­ly chal­lenged. Those rules require wire­less car­ri­ers to pro­vide data roam­ing to oth­er car­ri­ers “on com­mer­cial­ly rea­son­able terms and con­di­tions.”

    The data roam­ing rules cre­ate a bind­ing require­ment that car­ri­ers must offer com­mer­cial­ly rea­son­able terms, pro­vide guid­ance to help mon­i­tor whether terms being offered are rea­son­able, and lets the Com­mis­sion decide on a case-by-case basis whether com­pe­ti­tion has been harmed, the offi­cial said.

    Wheel­er also said he plans to solic­it pub­lic com­ment with a new dock­et titled “Pro­tect­ing and Pro­mot­ing the Open Inter­net.” He will also “[h]old Inter­net Ser­vice Providers to their com­mit­ment … [to] con­tin­ue to hon­or the safe­guards artic­u­lat­ed in the 2010 Open Inter­net Order.” That’s a ref­er­ence to an NCTA state­ment that “[t]he cable indus­try has always made it clear that it does not—and will not—block our cus­tomers’ abil­i­ty to access law­ful Inter­net con­tent, appli­ca­tions, or ser­vices.” Addi­tion­al­ly, Com­cast agreed to abide by no-block­ing and no-dis­crim­i­na­tion rules until 2018 in exchange for approval of its merg­er with NBCU­ni­ver­sal.

    Case-by-case reg­u­la­tion is inef­fec­tive, skep­tics say

    Senior Staff Attor­ney John Bergmay­er of con­sumer advo­ca­cy group Pub­lic Knowl­edge has pre­vi­ous­ly warned that case-by-case reg­u­la­tion is inef­fec­tive. “We’re in a bad place with net neu­tral­i­ty right now because the FCC got itself tied up in a knot with sub­tle lawyer­ing,” Bergmay­er wrote. “Instead of build­ing on its suc­cess­es as a telecom­mu­ni­ca­tions reg­u­la­tor, it tried to come up with a ‘third way.’ I’m skep­ti­cal that yet more sub­tle lawyering—a fourth way or a fifth way—is going to save us.”

    Pub­lic Knowl­edge CEO Gene Kim­mel­man released a state­ment today, say­ing, “While skep­ti­cal that the FCC’s ini­tial focus on sec­tion 706 will yield mean­ing­ful results, we are encour­aged to see that the FCC plans to keep its ‘reclas­si­fi­ca­tion’ pro­ceed­ing open.”

    Con­sumer advo­ca­cy group Free Press today said, “The FCC can’t pro­tect free speech and pre­vent dis­crim­i­na­tion under the so-called Sec­tion 706 author­i­ty dis­cussed in today’s announce­ment. Last mon­th’s court deci­sion made that crys­tal clear. Sec­tion 706 does­n’t work for Net Neu­tral­i­ty or any of the FCC’s stat­ed pol­i­cy goals. If the agency real­ly wants to stop cen­sor­ship, dis­crim­i­na­tion, and web­site block­ing, it must reclas­si­fy broad­band as a telecom­mu­ni­ca­tions ser­vice under Title II of the Com­mu­ni­ca­tions Act. The FCC’s reluc­tance to reverse its past mis­takes is extreme­ly short-sight­ed.”


    Posted by Pterrafractyl | February 19, 2014, 2:32 pm
  4. Well here’s an impor­tant oppor­tu­ni­ty to make lemon­ade out of lemons: Talk­ing Points Memo has a piece writ­ten by Johnothan Taplin, one of the peo­ple behind ‘The Annen­berg Cen­ter Prin­ci­ples for Net­work Neu­tral­i­ty’, a 2006 pro­pos­al that turns out to be very sim­i­lar to actu­al net neu­tral­i­ty rules pub­lished by the FCC last week. Taplin’s 2006 pro­pos­al involved mak­ing a ‘two-lane’ inter­net where ser­vices depen­dent on more band­width are allowed to pay ISPs for that extra band­width beyond what was con­sid­ered neu­tral and suf­fi­cient stan­dard. In the new FCC rul­ing, ISPs are going to be allowed to block con­tent from providers that don’t pay the ISP a “com­mer­cial­ly rea­son­able” fee.

    This two-lane approach under­stand­ably has many out­raged over what could be the death of the inter­net as we know it. If ISPs can start throt­tling con­tent for those that don’t pay the fee, the inter­net of the future could be effec­tive­ly dom­i­nat­ed by con­tent gen­er­at­ed almost exclu­sive­ly by the media giants because small­er com­peti­tors will sim­ply not be able to pay the nec­es­sary fees to get the need­ed band­width. That should be a pret­ty ter­ri­fy­ing future sce­nario for just about any­one that isn’t a media oli­garch.

    But as Jonathan Talpin points out in him piece below, the orig­i­nal 2006 pro­pos­al his group devel­oped includ­ed anoth­er key fac­tor that was sup­posed to make the sys­tem actu­al­ly work and not end up allow­ing a hand­ful of play­ers dom­i­nate online con­tent going for­ward: The two-lane inter­net sce­nario only works if there’s robust com­pe­ti­tion for broad­band inter­net access. In oth­er words, if ISPs get to work out spe­cial deals with con­tent providers they also have the pow­er not to accept those deals. And if an ISP is the the only ISP in town, that ISP can act like a local con­tent monop­oly provider. So if you want to see this two-lane sys­tem work, you’d need to ensure ALL mar­kets have robust broad­band com­pe­ti­tion.

    And what could ensure that kind of robust com­pe­ti­tion across the US? Well, munic­i­pal­i­ties could start doing what Chat­tanooga, TN is doing and offer broad­band inter­net access as a munic­i­pal ser­vice. That would cer­tain­ly guar­an­tee some degree of ISP com­pe­ti­tion. But here’s the prob­lem: The cable indus­try has spent decades lob­by­ing states to ban the set up of munic­i­pal broad­band, with 20 states now pre­emp­tive­ly ban­ning what Chat­tanooga did. So, at Jonathan Taplin points out, if the FCC is seri­ous about killing net neu­tral­i­ty, should­n’t munic­i­pal broad­band become a basic expec­ta­tion? After all, the big fears about two-lane inter­net mod­el is that it gives the biggest media giants and ISPs even more mar­ket pow­er than they already have. If the media giants get to break the inter­net in the US, should­n’t munic­i­pal broad­band be part of the deal? Or is it going to be a typ­i­cal ‘all oli­gop­oly, all the time’ kind of mar­ket­place?

    TPM Cafe
    Behind The FCC’s New Rules On Two-Lane Inter­net Speeds

    Jonathan Taplin – April 28, 2014, 12:11 PM EDT

    In Feb­ru­ary 2006, at a time when almost nobody was think­ing about the future of broad­band and net­work neu­tral­i­ty, we gath­ered a group of stake­hold­ers at the Annen­berg School for Com­mu­ni­ca­tions to try to work out some com­mon sense rules for the future. We had groups like Pub­lic Knowl­edge, for­mer Fed­er­al Com­mu­ni­ca­tions Com­mis­sion (FCC) offi­cials, tele­com and con­tent com­pa­ny exec­u­tives and some of the bright­est aca­d­e­m­ic thinkers about net­works. Over the course of a day and a half we came to a con­sen­sus and pub­lished The Annen­berg Cen­ter Prin­ci­ples for Net­work Neu­tral­i­ty.

    With the excep­tion of Xeni Jardin at Boing Boing, almost nobody paid any atten­tion to them. Imag­ine our sur­prise when this week we got indi­ca­tions that the FCC would pub­lish a set of rules that adhere fair­ly close­ly to our prin­ci­ples.

    Since the news on Wednes­day, both activists and edi­to­r­i­al pages have pushed back strong­ly against the FCC’s plans to cre­ate a fast lane for video stream­ing sites. I think the oppo­nents of the plan mis­un­der­stand the future of Over The Top (OTT) video ser­vices and what it will take to make them viable.

    Our approach in 2006 was to make sure that Inter­net Ser­vice Providers (ISPs) pro­vid­ed a basic access broad­band ser­vice that was total­ly neu­tral and suf­fi­cient to car­ry the most stan­dard video pro­to­cols such as YouTube. In 2006, we thought that was 1.5 megabytes per sec­ond (MBPS); today that should be 5 MBPS.

    But in an era when Net­flix is plan­ning to deliv­er 4K ultra high-def­i­n­i­tion video to the tele­vi­sion, an ISP may need to deliv­er up to 100 MBPS, assum­ing that more than one TV is on in the home. Clear­ly some­one is going to have to pay for the invest­ment to deliv­er such a ser­vice and in seek­ing a com­pro­mise between the OTT play­ers such as Net­flix, Ama­zon, Apple, Google and the Inter­net Ser­vice Providers, the FCC is cre­at­ing a path toward shar­ing the invest­ment costs to deliv­er the next gen­er­a­tion of TV ser­vices.

    What will pre­vent com­pa­nies like Com­cast from abus­ing this sys­tem is real com­pe­ti­tion in the home broad­band mar­ket of the kind we see in the mobile mar­ket­place.

    Last month, the new FCC Chair­man, Tom Wheel­er released a state­ment on “Open Inter­net Rules” in the wake of a Fed­er­al Appeals Court deci­sion on Net­work Neu­tral­i­ty. In a sec­tion on enhanc­ing com­pe­ti­tion, he wrote, “one obvi­ous can­di­date for close exam­i­na­tion was raised in Judge Lau­rence Silberman’s sep­a­rate opin­ion, name­ly legal restric­tions on the abil­i­ty of cities and towns to offer broad­band ser­vices to con­sumers in their com­mu­ni­ties.”

    In the case to which Wheel­er is refer­ring, Ver­i­zon vs. FCC, Sil­ber­man sug­gest­ed that the FCC’s pri­ma­ry oblig­a­tion was to pro­mote com­pe­ti­tion and remove bar­ri­ers to infra­struc­ture invest­ment. Those bar­ri­ers have been con­struct­ed by the cable and tel­co incum­bents and their lob­by­ists, who have con­vinced over 20 state leg­is­la­tures to pass bills bar­ring munic­i­pal­i­ties from enter­ing the broad­band mar­ket. Judge Sil­ber­man described these laws as pro­vid­ing “an eco­nom­ic pref­er­ence to a polit­i­cal­ly pow­er­ful con­stituen­cy, a con­stituen­cy that, as is true of typ­i­cal rent seek­ers, wish­es pro­tec­tion against mar­ket forces.”

    So per­haps the FCC should rule that such local pre­emp­tion is ille­gal and states can­not pre­vent cities or com­pa­nies like Google Fiber from com­pet­ing in the broad­band mar­ket. Then, as part of its merg­er approval deci­sion, Com­cast would pledge that it and its lob­by­ing arm, the Nation­al Cable and Telecom­mu­ni­ca­tions Asso­ci­a­tion (NCTA), would refrain from oppos­ing the FCC deci­sion.

    If that hap­pened, the kind of broad­band inno­va­tion we are see­ing in cities like Chat­tanooga, Kansas City and Austin could spread through­out the coun­try.

    Yes, per­haps the FCC should ban all that indus­try lob­by­ing that ruled out munic­i­pal ser­vices.

    Or, if that does­n’t work, per­haps there are oth­er options to ensure com­pe­ti­tion in the US’s media mar­ket in a new non-net-neu­tral world? After all, it isn’t just a near monop­oly in the ISP mar­ket that con­sumers need to be wor­ried about. It’s also the fact that com­pa­nies like Com­cast might end up own­ing both the con­tent cre­ators as well as the con­tent dis­tri­b­u­tion chan­nels, rais­ing some very alarm­ing pos­si­bil­i­ties in the era of an unequal inter­net.

    So what could those options be that help pre­vent the giants from tak­ing over the inter­net? How about instead of ban­ning munic­i­pal broad­band we ban media giants instead? Just bust them up! While break­ing up a media giant might seem like a Her­culean task, it’s a real option (just ask Argenti­na. So should the end of net neu­tral­i­ty also end the era of the media super-giants? Big­ger isn’t always bet­ter.

    Posted by Pterrafractyl | April 28, 2014, 5:39 pm
  5. http://finance.yahoo.com/news/german-parliament-cuts-ties-verizon-132154762.html

    Ger­man par­lia­ment cuts ties with Ver­i­zon in wake of spy­ing row

    June 27, 2014 9:21 AM

    BERLIN, June 27 (Reuters) — Ger­many’s low­er house of par­lia­ment has joined the gov­ern­ment in cut­ting ties with U.S. tele­coms firm Ver­i­zon Com­mu­ni­ca­tions Inc, in reac­tion to a scan­dal last year over U.S. gov­ern­ment spy­ing and alle­ga­tions firms were hand­ing over data.

    Posted by GK | June 29, 2014, 2:39 pm
  6. FYI, the EU’s net neu­tral­i­ty laws just got the kiss of death:

    The Verge
    Angela Merkel argues against net neu­tral­i­ty, calls for spe­cial access fast lane

    By Dante D’O­razio
    on Decem­ber 6, 2014 11:22 pm

    Ger­man Chan­cel­lor Angela Merkel has laid out her vision for the future of the inter­net, and net neu­tral­i­ty pro­po­nents won’t be pleased. In com­ments on Thurs­day in Berlin, Merkel argued for a two-lane inter­net. One lane for “spe­cial,” high pri­or­i­ty ser­vice, and anoth­er that’s meant to resem­ble the inter­net as it exists today.

    While sup­port­ers of net neu­tral­i­ty argue that it is key to the con­tin­ued growth of the inter­net, Merkel believes just the oppo­site. She argues that fast lanes are nec­es­sary for the devel­op­ment of new, advanced uses of the inter­net, like telemed­i­cine or dri­ver­less cars. Accord­ing to Merkel, with­out guar­an­teed, fast-access inter­net con­nec­tions, such inno­va­tions won’t come to mar­ket.

    It’s not clear how such a two-lane sys­tem would be imple­ment­ed or reg­u­lat­ed. For instance, it’s unknown if there would be lim­its on what sort of com­pa­nies could pay for access to fast-lane inter­net. A report from Frank­furter All­ge­meine cites sources inside the Ger­man gov­ern­ment who say that on-demand inter­net video stream­ing ser­vices would be among the com­pa­nies that would be able to pay for access for high-speed ser­vice.

    The Euro­pean Union cur­rent­ly man­dates true net neu­tral­i­ty, though dis­cus­sions have been under­way for the future of inter­net reg­u­la­tion. Merkel believes that her posi­tion is a mid­dle ground, but the idea that the gen­er­al traf­fic lane will oper­ate under net neu­tral­i­ty depends entire­ly on how much band­width it receives from inter­net providers. If the main traf­fic lane isn’t fast, and any com­pa­ny can opt for fast-lane access, com­pa­nies will like­ly find it nec­es­sary to pay up for direct access just to com­pete — the exact oppo­site of net neu­tral­i­ty.

    Ok, so spe­cial ser­vices like self-dri­ving cars, telemed­i­cine and “on-demand inter­net nideo stram­ing ser­vices” (Net­flix) will be able to access the “fast lane”. And pre­sum­ably lots of oth­er web­sites that pay. And Merkel is appar­ent­ly push­ing a ‘mid­dle ground’ idea that “If the main traf­fic lane isn’t fast, and any com­pa­ny can opt for fast-lane access, com­pa­nies will like­ly find it nec­es­sary to pay up for direct access just to com­pete — the exact oppo­site of net neu­tral­i­ty.

    “If the main traf­fic lain isn’t fast, and any com­pa­ny can opt for fast-lane access, com­pa­nies will like­ly find it nec­es­sary to pay up for direct access just to com­pete””. Bye bye EU net neu­tral­i­ty.

    Also keep in mind that Angela Merkel is advo­cat­ing fur­ther tele­com con­sol­i­da­tion across the EU and the new EU Dig­i­tal the num­ber of major play­ers is going to shrink. So, again, Bye bye net neu­tral­i­ty:

    Finan­cial Times
    Lex in-depth: Euro­pean tele­coms

    Com­pe­ti­tion and sur­feit of providers mean Europe’s tele­coms groups must con­sol­i­date

    Novem­ber 18, 2014 8:22 pm
    Alan Livsey and Robert Arm­strong

    The door is open. Europe’s tele­coms need only step through it. Jean-Claude Junck­er, the pres­i­dent of the Euro­pean Com­mis­sion, wants a sin­gle mar­ket in dig­i­tal com­mu­ni­ca­tions to spark growth in employ­ment and out­put. This can­not hap­pen with­out increased invest­ment from the tele­coms indus­try. So the com­mis­sion, with sup­port from Ger­man Chan­cel­lor Angela Merkel, is look­ing favourably on con­sol­i­da­tion of the sec­tor. The idea is to increase the returns on, and there­fore the incen­tive to invest in, infra­struc­ture. This reg­u­la­to­ry regime change could set off eco­nom­i­cal­ly trans­for­ma­tive events if the industry’s lead­ers show imag­i­na­tion, ini­tia­tive and flex­i­bil­i­ty.

    The first domi­no fell this sum­mer, when the third and fourth largest play­ers in the Ger­man mar­ket, Telefónica’s O2 and KPN’s E‑Plus, received approval for a merg­er. In an unusu­al move, the com­mis­sion declared itself the prop­er author­i­ty to deter­mine whether the merg­er was anti-com­pet­i­tive and pushed the deal through over the objec­tions of the country’s anti-monop­oly author­i­ty.

    The indus­try has endured vicious com­pe­ti­tion, par­tic­u­lar­ly in mobile, for sev­er­al years. Con­sumers have enjoyed low tar­iffs but mobile rev­enues in the mar­kets have fall­en by 18 per cent since 2008. Prof­its (at the lev­el of earn­ings before inter­est, tax­es, depre­ci­a­tion and amor­ti­sa­tion) have been even worse, down 22 per cent. Return on cap­i­tal employed in mobile has been cut almost in half in the same peri­od, accord­ing to New Street Research.


    There is poten­tial for con­sol­i­da­tion. Sev­en of the largest Euro­pean mar­kets have more than three large play­ers in mobile – the thresh­old beyond which com­pe­ti­tion tends to become irra­tional. France, Italy and the UK stand out as intense­ly com­pet­i­tive mar­kets in which deals are like­ly to occur.


    Con­sol­i­da­tion with­in Euro­pean coun­tries, by improv­ing the returns on infra­struc­ture invest­ment, should bring Mr Juncker’s dream of bet­ter 4G and broad­band access clos­er to real­i­ty: a sin­gle Euro­pean tele­com mar­ket that ignores bor­ders. Groups oper­at­ing in Europe, such as Voda­fone, are effec­tive­ly hold­ing com­pa­nies that oper­ate in dif­fer­ent mar­kets. A true pan-Euro­pean tele­coms mar­ket requires a reg­u­la­to­ry rethink. Mean­while, Europe’s tele­coms com­pa­nies must do their part and con­sol­i­date.

    “The idea is to increase the returns on, and there­fore the incen­tive to invest in, infra­struc­ture”. LOL! That sure sounds like con­sol­i­da­tion and lots of “fast-lane” fees is the order of the day so get ready for the sloooow laaaane once this process is com­plete. When the num­ber of large play­ers in each mar­ket drops to three or less just watch the throt­tling begin. Crap­py “slow lane” ser­vice that push web­site own­ers into buy­ing “fast lane” access is going to be a big new prof­it gen­er­a­tor.

    As long as the spe­cial fast lane is lim­it­ed to a hand­ful of spe­cial activ­i­ties, you can have a tiered inter­net with­out killing net neu­tral­i­ty. But is that real­is­tic?

    Or maybe the EU will just gut the net neu­tral­i­ty leg­is­la­tion direct­ly.

    Posted by Pterrafractyl | December 8, 2014, 12:22 am
  7. Here’s more on the recent move­ment to make the EU’s new net neu­tral­i­ty laws a lot less neu­tral:

    The New York Times
    Europe Takes Anoth­er Look at Net Neu­tral­i­ty
    By Mark Scott
    Novem­ber 25, 2014 12:16 pm

    LONDON — Just as the Unit­ed States takes steps to secure people’s unfet­tered access to the Inter­net, Europe may soon back­track on its own pro­pos­als.

    The idea of so-called net neu­tral­i­ty — or the con­cept that every­one should have equal access to all online con­tent — will again take cen­ter stage on Thurs­day as politi­cians from the 28-mem­ber bloc meet to dis­cuss how the rules should be put into effect across the region.

    In the Unit­ed States, Pres­i­dent Oba­ma recent­ly called on the Fed­er­al Com­mu­ni­ca­tions Com­mis­sion to adopt rules that would stop broad­band com­pa­nies from slow­ing down cer­tain types of online con­tent. The Euro­pean Par­lia­ment out­lined sim­i­lar rules ear­li­er this year.

    Now, though, some Euro­pean law­mak­ers are push­ing to loosen the rules some­what, allow­ing com­pa­nies to poten­tial­ly charge for faster access to their net­works.

    A draft pro­pos­al cir­cu­lat­ed among the mem­bers of the Euro­pean Union, released by Euro­pean Dig­i­tal Rights, a Brus­sels-based advo­ca­cy group, would remove the strict def­i­n­i­tion of net neu­tral­i­ty from new Euro­pean tele­com leg­is­la­tion that is expect­ed to be final­ized some­time next year.

    The pro­pos­al, cir­cu­lat­ed by Italy, which cur­rent­ly holds the six-month pres­i­den­cy of the Euro­pean Union, sug­gests allow­ing broad­band and tele­com com­pa­nies to man­age traf­fic across their net­works (and poten­tial­ly offer faster speeds to com­pa­nies that are will­ing to pay a pre­mi­um) as long as they pro­vide a min­i­mal lev­el of access for all online con­tent.

    The sug­ges­tions, which still must be worked out among indi­vid­ual coun­tries, the Euro­pean Par­lia­ment and the Euro­pean Com­mis­sion, come as the region’s Inter­net ser­vice providers are lob­by­ing hard to weak­en Europe’s orig­i­nal net neu­tral­i­ty pro­pos­als.

    Tele­com com­pa­nies like Voda­fone of Britain and Orange of France are con­cerned that the cur­rent pro­pos­als would not allow them to charge for improved access to their net­works to gen­er­ate rev­enue that they say is need­ed to upgrade Europe’s Inter­net infra­struc­ture.


    And even while some Euro­pean law­mak­ers are mov­ing to alter the region’s net neu­tral­i­ty pro­pos­als, oth­ers con­tin­ue to push strong rules.

    “All the traf­fic has to be treat­ed equal­ly,” Andrus Ansip, the new dig­i­tal chief at the Euro­pean Com­mis­sion, told Reuters this week when asked about the poten­tial water­ing down of Europe’s net neu­tral­i­ty rules. “The Inter­net has to stay open for every­body.”

    When you read that the draft leg­is­la­tion would “remove the strict def­i­n­i­tion of net neu­tral­i­ty from new Euro­pean tele­com leg­is­la­tion that is expect­ed to be final­ized some­time next year,” but then also read that Andrus Ansip, the new dig­i­tal chief at the Euro­pean Com­mis­sion, said “all the traf­fic has to be treat­ed equally...The Inter­net has to stay open for every­body,” keep in mind that this arti­cle was pub­lished on Novem­ber 25, over a week before Angela Merkel’s call for a two-tiered inter­net.

    Also keep in mind that Merkel’s vision of a fast-lane for “spe­cial ser­vices” would report­ed­ly allow on-demand video stream­ing ser­vices like Net­flix to sign up for the fast-lane access.

    And, final­ly, keep in mind that, in order imple­ment Merkel’s new scheme, the crit­i­cal amend­ments to the EU’s net neu­tral­i­ty law passed back in April that were seen as the amend­ments that actu­al­ly enforced net neu­tral­i­ty in the new law are prob­a­bly going to require some exten­sive amend­mend­ing:

    Euro­pean Par­lia­ment pass­es strong net neu­tral­i­ty law, along with major roam­ing reforms
    David Mey­er
    Apr. 3, 2014 — 3:10 AM PST

    Euro­pean fans of the open inter­net can breathe a sigh of relief: the Euro­pean par­lia­ment has passed a major pack­age of tele­coms law reform, com­plete with amend­ments that prop­er­ly define and pro­tect net neu­tral­i­ty.

    The amend­ments (PDF) were intro­duced by the Social­ist, Lib­er­al, Green and Left blocs in the Euro­pean Par­lia­ment after the final com­mit­tee to tweak the pack­age – the indus­try com­mit­tee – left in a bunch of loop­holes that would have allowed tel­cos to start clas­si­fy­ing web ser­vices of their choice as “spe­cial­ized ser­vices” that they can treat dif­fer­ent­ly.

    It’s a good thing the net neu­tral­i­ty argu­ment didn’t sink the whole pack­age, as it also includes new laws to elim­i­nate roam­ing fees with­in Europe, cre­at­ing a tru­ly sin­gle mar­ket for tele­coms ser­vices. Now the whole pack­age gets passed through to the next Par­lia­ment (elec­tions are com­ing up in May), then the rep­re­sen­ta­tives of Euro­pean coun­tries for final approval.


    In a state­ment, Amelia Ander­s­dot­ter, the Swedish mem­ber of the Euro­pean Par­lia­ment (MEP) who heads up the Pirate fac­tion in the Euro­pean Par­lia­ment, said:

    “Thank­ful­ly, a major­i­ty of MEPs has seen sense today and vot­ed to uphold the prin­ci­ple of net neu­tral­i­ty in the EU. The pro­pos­als by the Com­mis­sion, which would essen­tial­ly have giv­en large providers the all-clear for dis­crim­i­nat­ing against users as they see fit, have been revised. Today’s vote would explic­it­ly pro­vide for net neu­tral­i­ty and will hope­ful­ly ensure a lev­el play­ing field for all online ser­vices and users, pro­vid­ing for a more open inter­net envi­ron­ment in which inno­va­tion is encour­aged.”


    Not all the amend­ments were passed by mem­bers of the Euro­pean Par­lia­ment (MEPs) but the big ones got through. Amend­ment 234 gave a strong def­i­n­i­tion for net neu­tral­i­ty:

    “Net neu­tral­i­ty” means the prin­ci­ple accord­ing to which all inter­net traf­fic is treat­ed equal­ly, with­out dis­crim­i­na­tion, restric­tion or inter­fer­ence, inde­pen­dent­ly of its sender, recip­i­ent, type, con­tent, device, ser­vice or appli­ca­tion.

    Amend­ment 235 gave a strong def­i­n­i­tion of spe­cial­ized ser­vices, mak­ing it clear that ISPs can’t sim­ply decide Net­flix, for exam­ple, is no longer a stan­dard inter­net ser­vice:

    “Spe­cialised ser­vice” means an elec­tron­ic com­mu­ni­ca­tions ser­vice opti­mised for spe­cif­ic con­tent, appli­ca­tions or ser­vices, or a com­bi­na­tion there­of, pro­vid­ed over log­i­cal­ly dis­tinct capac­i­ty, rely­ing on strict admis­sion con­trol, offer­ing func­tion­al­i­ty requir­ing enhanced qual­i­ty from end to end, and that is not mar­ket­ed or usable as a sub­sti­tute for inter­net access ser­vice.

    And Amend­ment 236 ham­mered that point home:

    Providers of inter­net access, of elec­tron­ic com­mu­ni­ca­tions to the pub­lic and providers of con­tent, appli­ca­tions and ser­vices shall be free to offer spe­cialised ser­vices to end-users. Such ser­vices shall only be offered if the net­work capac­i­ty is suf­fi­cient to pro­vide them in addi­tion to inter­net access ser­vices and they are not to the detri­ment of the avail­abil­i­ty or qual­i­ty of inter­net access ser­vices. Providers of inter­net access to end-users shall not dis­crim­i­nate between func­tion­al­ly equiv­a­lent ser­vices and appli­ca­tions.

    Accord­ing to the pro-net neu­tral­i­ty lob­by group Access, this is all a major win except for the defeat of an arti­cle that would have clear­ly set out how to enforce net neu­tral­i­ty.

    “The Coun­cil rep­re­sen­ta­tives are expect­ed to adopt a final posi­tion on the Tele­coms reg­u­la­tion lat­er in 2014,” Access said, refer­ring to the rep­re­sen­ta­tives of mem­ber states. “Access urges the Coun­cil not to devi­ate from the posi­tion adopt­ed today by the Euro­pean Par­lia­ment. The Coun­cil must main­tain the nec­es­sary safe­guards to pro­tect net neu­tral­i­ty and pro­hib­it net­work dis­crim­i­na­tion in Europe. This includes ensur­ing that this prin­ci­ple can be effec­tive­ly enforced.”

    Nat­u­ral­ly, the car­ri­ers are deeply unhap­py. In a state­ment, mobile car­ri­er indus­try body the GSMA said it “recog­nis­es the efforts of Rap­por­teur Pilar del Castil­lo to devel­op a con­struc­tive response to the Commission’s Con­nect­ed Con­ti­nent pro­pos­als but believes that the over­all pack­age fails to address the key chal­lenge of stim­u­lat­ing growth and invest­ment.”

    “Net­work oper­a­tors must be able to devel­op ser­vices that meet the needs of con­sumers and charge dif­fer­ent prices for dif­fer­en­ti­at­ed prod­ucts,” GSMA direc­tor gen­er­al Anne Bou­verot exclaimed.

    Bye bye amend­ments 234–236.

    Posted by Pterrafractyl | December 11, 2014, 9:13 pm
  8. Here’s a peak at one pos­si­ble net neu­tral­i­ty future for the US: Indus­try-craft­ed ‘net neu­tral­i­ty-lite’:

    Wash­ing­ton Post
    Con­gress wants to leg­is­late net neu­tral­i­ty. Here’s what that might look like.

    By Bri­an Fung Decem­ber 19, 2014

    Repub­li­cans in Con­gress appear like­ly to intro­duce leg­is­la­tion next month aimed at pre­vent­ing Inter­net providers from speed­ing up some Web sites over oth­ers, in hopes of chang­ing the tone of a crit­i­cal debate over the future of the Web, accord­ing to indus­try offi­cials famil­iar with the plans.

    The indus­try-backed pro­pos­al would pre­empt efforts by the Fed­er­al Com­mu­ni­ca­tions Com­mis­sion to draw up new rules for Inter­net providers. While key details of the pro­posed bill are still being ham­mered out, the leg­is­la­tion would attempt to end a debate over the FCC’s pow­er to reg­u­late net neu­tral­i­ty, or the idea that broad­band com­pa­nies should treat all Inter­net traf­fic equal­ly, said the peo­ple famil­iar with the plan who declined to be named because the talks were pri­vate.

    The indus­try offi­cials said they are dis­cussing details of the pro­pos­al with sev­er­al Repub­li­can law­mak­ers, whom they declined to name. The offi­cials also said the pro­pos­al is being backed by sev­er­al large telecom­mu­ni­ca­tions com­pa­nies, which they also declined to name.

    One impor­tant piece of the pro­posed leg­is­la­tion would estab­lish a new way for the FCC to reg­u­late broad­band providers by cre­at­ing a sep­a­rate pro­vi­sion of the Com­mu­ni­ca­tions Act known as “Title X,” the peo­ple said. Title X would enshrine ele­ments of the tough net neu­tral­i­ty prin­ci­ples called for by Pres­i­dent Oba­ma last month. For exam­ple, it would give FCC Chair­man Tom Wheel­er the author­i­ty to pre­vent broad­band com­pa­nies from block­ing or slow­ing traf­fic to Web sites, or charg­ing con­tent com­pa­nies such as Net­flix for faster access to their sub­scribers — a tac­tic known as “paid pri­or­i­ti­za­tion.”

    But those new pow­ers would come with a trade-off, the peo­ple said. In exchange for Title X, the FCC would refrain from reg­u­lat­ing net neu­tral­i­ty using Title II of the Com­mu­ni­ca­tions Act — a step favored by many advo­cates of aggres­sive reg­u­la­tion, includ­ing the pres­i­dent, they said.

    FCC offi­cials declined to com­ment for this sto­ry.

    Broad­band providers have strong­ly opposed aggres­sive net neu­tral­i­ty rules, argu­ing it would stymie the indus­try’s growth. But in recent months some indus­try offi­cials have said they were open to the same net neu­tral­i­ty prin­ci­ples advo­cat­ed by Oba­ma, high­light­ing a sliv­er of poten­tial com­mon ground between Inter­net providers and net neu­tral­i­ty advo­cates. In a blog post last month, Com­cast said it it opposed block­ing or slow­ing traf­fic to Web sites, along with paid pri­or­i­ti­za­tion. AT&T made sim­i­lar argu­ments in June.

    “We oppose the con­cept of fast lanes and slow lanes on the Inter­net,” wrote Jim Cic­coni, an AT&T pol­i­cy exec­u­tive, in a blog post.

    The Inter­net ser­vice providers’ state­ments offer a poten­tial open­ing for a leg­isla­tive com­pro­mise, one that seeks to clar­i­fy the FCC’s author­i­ty to pre­serve net neu­tral­i­ty while avoid­ing a show­down over Title II.

    “Con­sen­sus on this issue is real­ly not that far apart,” said an indus­try offi­cial, who spoke on con­di­tion of anonymi­ty because the talks were ongo­ing. “There’s com­mon under­stand­ing that rules are need­ed to pro­tect con­sumers.”

    While Repub­li­can aides to both the Sen­ate and House com­merce com­mit­tees declined to com­ment on the indus­try’s pro­pos­al, the tim­ing of the push is con­sis­tent with state­ments by top GOP law­mak­ers on the issue. Ear­li­er this month, Sen. John Thune (R‑S.D.), the top Repub­li­can on the Sen­ate Com­merce Com­mit­tee, said he was “very inter­est­ed” in draft­ing leg­is­la­tion to address net neu­tral­i­ty. Con­gress would need to act “fair­ly soon next year” if it wants to find a leg­isla­tive fix, accord­ing to a Thune spokes­woman. Any such leg­is­la­tion would have to move through Thune’s com­mit­tee.

    The FCC is wide­ly expect­ed to unveil its net neu­tral­i­ty pro­pos­al in Feb­ru­ary or March, leav­ing lit­tle time for law­mak­ers to intro­duce a bill. By unveil­ing their leg­is­la­tion before Wheel­er’s draft rules, Repub­li­cans could draw momen­tum away from the agency, where pres­sure has been mount­ing late­ly for stronger action, the indus­try offi­cials said.

    If Wheel­er struck first with pro­posed rules with aggres­sive net neu­tral­i­ty rules, many Democ­rats would like­ly find it hard­er to sup­port a Repub­li­can alter­na­tive. On Thurs­day, Democ­rats led by Sen. Ed Markey (D‑Mass.) and Rep. Anna Eshoo (D‑Calif.) sent a bicam­er­al let­ter to Wheel­er demand­ing that he act more swift­ly to adopt new rules.


    Repub­li­cans may find it dif­fi­cult to attract enough con­ser­v­a­tive sup­port for a net neu­tral­i­ty bill that updates the FCC’s pow­ers. Many of the most out­spo­ken crit­ics of the agency, such as Sen. Ted Cruz (R‑Tex.) or Rep. Mar­sha Black­burn (R‑Tenn.), ardent­ly oppose any new reg­u­la­tions on Inter­net providers.

    But with enough bipar­ti­san sup­port, Repub­li­cans could quick­ly move a bill to Oba­ma’s desk. Whether the pres­i­dent signs it could hinge on whether he could claim it as a polit­i­cal vic­to­ry, pol­i­cy ana­lysts say. If the bill is seen as not aggres­sive enough, Oba­ma will like­ly veto the leg­is­la­tion, observers said. Cast as a com­pro­mise giv­ing the FCC wide lat­i­tude over net neu­tral­i­ty, the bill could pass — par­tic­u­lar­ly if indus­try offi­cials offer not to sue the FCC over its pro­posed rules, ana­lysts have said.

    So that was the industry’s/GOP’s plan last month: put a ‘net neu­tral­i­ty-lite’ plan out ear­ly in 2015 to pre­empt the FCC and get a net neu­tral­i­ty deal that avoid any “Title II” reg­u­la­tions. And then try to get the sup­port of the far right law mak­ers like Ted Cruz and Mar­sha Black­burn who oppose any reg­u­la­tions at all.

    That’s the plan. It may not be an easy plan:

    The Hill
    House GOP law­mak­er makes net neu­tral­i­ty warn­ing

    By Julian Hat­tem — 01/05/15 02:30 PM EST

    Tough net neu­tral­i­ty rules would lead to new tax­es and unnec­es­sary hur­dles for new com­pa­nies, Rep. Mar­sha Black­burn (R‑Tenn.) warned on Mon­day.

    In an inter­view on Fox Busi­ness Net­work, Black­burn warned the Fed­er­al Com­mu­ni­ca­tions Com­mis­sion (FCC) against writ­ing strong rules that allowed it to reg­u­late the Inter­net with the same pow­ers it uses to police tra­di­tion­al phone lines.

    “I talk to those inno­va­tors every sin­gle day,” she said. “They do not want to have to fool with anoth­er fed­er­al agency. They do not want addi­tion­al tax­es.”

    Black­burn, who is a mem­ber of the Ener­gy and Com­merce Com­mit­tee and has been a promi­nent crit­ic of the FCC’s reg­u­la­tions, point­ed to a recent study show­ing that reclas­si­fy­ing the Web so it could be treat­ed like a util­i­ty would lead to $15 bil­lion in new state fees, plus anoth­er $2 bil­lion in fed­er­al charges. The study has been crit­i­cized for not men­tion­ing a fed­er­al law that bans state and local tax­es on Inter­net access.

    Instead of hav­ing the gov­ern­ment write rules ban­ning com­pa­nies from slow­ing or block­ing access to par­tic­u­lar web­sites, com­pa­nies should be allowed to cut deals and deter­mine how best to reach their audi­ence, Black­burn said.

    “It is called com­pa­nies find­ing a way to trans­act busi­ness and not have the fed­er­al gov­ern­ment man­dat­ing how they are going to trans­act busi­ness,” she said. “Let’s leave it to the pri­vate sec­tor.”


    “It is called com­pa­nies find­ing a way to trans­act busi­ness and not have the fed­er­al gov­ern­ment man­dat­ing how they are going to trans­act busi­ness ... Let’s leave it to the pri­vate sec­tor.” That’s the think­ing from elect­ed offi­cials like Mar­sha Black­burn and while the tele­com indus­try would no doubt LOVE to have her “Let’s leave it to the pri­vate sec­tor” approach win the day, that approach also ensures that you’ll nev­er have the kind of bipar­ti­san agree­ment need­ed for any sort of long-term reg­u­la­to­ry cer­tain­ty.

    So we’ll see just how much oppo­si­tion to the tele­com indus­try’s ‘net neu­tral­i­ty-lite’ plan. But we won’t have to wait and see if the indus­try and its GOP rep­re­sen­ta­tives will be able to unfurl its plan in Con­gress before the FCC devel­ops an even tougher plan involv­ing “Title II” reg­u­la­tions because that just hap­pened:

    Los Ange­les Times
    FCC Chair­man Wheel­er hints at shift in net neu­tral­i­ty rules
    By Jon Healey and Meg James

    Jan­u­ary 7, 2015, 6:10 PM

    The nation’s top tele­com reg­u­la­tor strong­ly hint­ed that he plans to pro­pose more rig­or­ous reg­u­la­tions on Inter­net ser­vice providers — set­ting up a poten­tial­ly bit­ter clash with pow­er­ful cable tele­vi­sion oper­a­tors and oth­ers that offer Inter­net access.

    A new set of Inter­net reg­u­la­tions is shap­ing up to become one of the most fierce­ly debat­ed issues in Wash­ing­ton this year as the Fed­er­al Com­mu­ni­ca­tions Com­mis­sion tries to replace the neu­tral­i­ty rules tossed out by a fed­er­al appeals court last year.

    On Wednes­day, FCC Chair­man Thomas E. Wheel­er sug­gest­ed that he would pro­pose rules next month that would treat broad­band Inter­net ser­vice providers as util­i­ties sub­ject to more intense reg­u­la­tion than they have been in the past.

    Such a move is expect­ed to draw chal­lenges in court from indus­try oppo­nents and in Con­gress from the Repub­li­can major­i­ty which favors a more per­mis­sive approach and prob­a­bly would try to over­turn new rules or deny the agency fund­ing to enforce them.

    Any FCC deci­sion to reclas­si­fy Inter­net ser­vice providers and reg­u­late them under Title II of the Com­mu­ni­ca­tions Act would be a sting­ing defeat for Com­cast Corp., AT&T Inc., Ver­i­zon Com­mu­ni­ca­tions Inc. and oth­er broad­band providers.

    It would be a vic­to­ry for Pres­i­dent Oba­ma and oth­er advo­cates of a strin­gent approach to so-called net­work neu­tral­i­ty, the notion that Inter­net providers not favor traf­fic from some web­sites over oth­ers.

    Dur­ing a ques­tion-and-answer ses­sion at the Con­sumer Elec­tron­ics Show, Wheel­er declined to pro­vide details on the new approach, insist­ing that the pub­lic would have to wait until Feb­ru­ary when the pro­pos­al is unveiled.

    The five-mem­ber FCC is expect­ed to vote on a new set of net neu­tral­i­ty rules on Feb. 26.

    “We’re going to pro­pose rules that say that no block­ing, no throt­tling, [no] paid pri­or­i­ti­za­tion — all that list of issues — and that there is a yard­stick against which behav­ior should be mea­sured. And that yard­stick is ‘just and rea­son­able,’ ” Wheel­er told a packed con­fer­ence room at the Las Vegas Con­ven­tion Cen­ter.

    Ini­tial­ly, Wheel­er had resist­ed the idea of bring­ing Inter­net providers under Title II, hop­ing to craft net neu­tral­i­ty rules that con­tin­ued to treat Inter­net providers as light­ly reg­u­lat­ed enti­ties called infor­ma­tion ser­vices.

    Wheel­er’s orig­i­nal pro­pos­al would have allowed Inter­net providers to strike deals with con­tent com­pa­nies and online ser­vices as long as they were “com­mer­cial­ly rea­son­able.”

    That approach drew sup­port from the telecom­mu­ni­ca­tions indus­try, but many net neu­tral­i­ty advo­cates argued that it would allow broad­band providers to divide their net­works into fast and slow lanes. That would give deep-pock­et­ed com­pa­nies anoth­er advan­tage over start-ups, harm­ing com­pe­ti­tion and inno­va­tion, they said.

    Oba­ma force­ful­ly jumped into the debate in Novem­ber, say­ing the FCC should adopt strict rules that would reclas­si­fy the Inter­net as a util­i­ty.

    “For almost a cen­tu­ry, our law has rec­og­nized that com­pa­nies [that] con­nect you to the world have spe­cial oblig­a­tions not to exploit the monop­oly they enjoy over access into and out of your home or busi­ness,” Oba­ma said in a video mes­sage that was received as a warn­ing shot from the White House.

    Key GOP mem­bers blast­ed Oba­ma’s call for tough reg­u­la­tions. But such net neu­tral­i­ty rules are strong­ly sup­port­ed by most Democ­rats.

    Wheel­er, who was appoint­ed by Oba­ma, said that as the FCC stud­ied the issue, it “became obvi­ous” that the “com­mer­cial­ly rea­son­able” stan­dard he orig­i­nal­ly pro­posed for judg­ing Inter­net providers “could be inter­pret­ed as what is rea­son­able for the [Inter­net providers], not what’s rea­son­able for con­sumers or inno­va­tors.”

    “And that’s the wrong ques­tion and the wrong answer,” he said, “because the issue here is how do we make sure that con­sumers and inno­va­tors have access to open net­works.”

    The bet­ter stan­dard for judg­ing behav­ior of net­work oper­a­tors is the “just and rea­son­able” stan­dard under Title II, Wheel­er said.


    The lat­est net neu­tral­i­ty pro­pos­al comes as the FCC sep­a­rate­ly is review­ing two colos­sal media merg­ers: Com­cast’s pro­posed $45-bil­lion takeover of Time Warn­er Cable Inc., which would make it the nation’s dom­i­nant Inter­net provider; and AT&T’s pro­posed takeover of satel­lite-tele­vi­sion car­ri­er DirecTV, a $49-bil­lion deal.

    The two merg­ers, which both need fed­er­al approval, are expect­ed to reshape the media indus­try by giv­ing more clout to the own­ers of the broad­band net­works.

    Com­cast declined to com­ment Wednes­day. How­ev­er, in a fil­ing with the FCC last month, the Philadel­phia cable giant said that a util­i­ty reclas­si­fi­ca­tion “not only would be harm­ful, but also is com­plete­ly unnec­es­sary and would not accom­plish the com­mis­sion’s core pub­lic inter­est objec­tives.”


    The bet­ter stan­dard for judg­ing behav­ior of net­work oper­a­tors is the “just and rea­son­able” stan­dard under Title II, Wheel­er said. That’s big.

    The pro­posed Com­cast and Time Warn­er is also pret­ty damn big and it’s hap­pen­ing right now. A tele­com anti-trust fight in the mid­dle of the big net neu­tral­i­ty fight. While the merg­er itself might suck, the tim­ing is awe­some.

    Posted by Pterrafractyl | January 7, 2015, 8:41 pm
  9. Wel­come to the lat­est prod­uct of the GOP’s scan­dal-machine: Did Pres­i­dent Oba­ma improp­er­ly influ­ence FCC chair­man Tom Wheel­er into sup­port­ing a stronger net neu­tral­i­ty pro­pos­al by telling the world that he sup­port­ed strong net neu­tral­i­ty? Reubli­cans want to know:

    The wall Street Jour­nal
    House to Probe White House Role in FCC’s ‘Net Neu­tral­i­ty’ Pro­pos­al
    Pan­el to Inves­ti­gate Whether White House Improp­er­ly Influ­enced Agency on Broad­band Rules
    By Gau­tham Nagesh And
    Siob­han Hugh­es
    Updat­ed Feb. 6, 2015 7:02 p.m. ET

    WASHINGTON—A House over­sight com­mit­tee on Fri­day said it was launch­ing an inves­ti­ga­tion into whether the White House improp­er­ly influ­enced the Fed­er­al Com­mu­ni­ca­tions Com­mis­sion on its new rules for how broad­band providers treat traf­fic on their net­works.

    Rep. Jason Chaf­fetz (R., Utah), chair­man of the House Over­sight and Gov­ern­ment Reform Com­mit­tee, wrote to FCC Chair­man Tom Wheel­er on Fri­day demand­ing all doc­u­ments and com­mu­ni­ca­tions between the FCC and the White House or oth­er exec­u­tive-branch agen­cies on the issue, along with all inter­nal dis­cus­sion at the FCC.

    Mr. Wheel­er on Wednes­day made pub­lic the out­lines of a pro­pos­al that would ban broad­band providers from block­ing, slow­ing down, or speed­ing up cer­tain web­sites in exchange for pay­ment.

    The plan would use strong util­i­ty-like rules to reg­u­late broad­band com­pa­nies, an approach large­ly in line with Pres­i­dent Barack Oba­ma ’s call in Novem­ber for the “strongest pos­si­ble rules” to pro­tect net neutrality—the prin­ci­ple that all Inter­net traf­fic should be treat­ed equal­ly.

    To imple­ment those rules, Mr. Wheel­er pro­posed reclas­si­fy­ing broad­band from a light­ly reg­u­lat­ed infor­ma­tion ser­vice to a more strict­ly over­seen telecom­mu­ni­ca­tions ser­vice. Advo­cates of such an approach say that with­out such rules, broad­band com­pa­nies could charge tolls to web­sites for their fastest speeds, putting star­tups and small­er web­sites at a dis­ad­van­tage.

    Mr. Wheel­er had pre­vi­ous­ly laid out pro­pos­als to his fel­low com­mis­sion­ers that would­n’t have used the pub­lic-util­i­ty route. Then Mr. Oba­ma made his state­ment in Novem­ber, one of a series of events out­lined in a Wall Street Jour­nal arti­cle Thurs­day that appeared to leave Mr. Wheel­er lit­tle choice but to go with the stronger rules.

    “[R]eports indi­cate that views expressed by the White House poten­tial­ly had an improp­er influ­ence on the devel­op­ment of the draft Open Inter­net Order cir­cu­lat­ed inter­nal­ly at the Com­mis­sion on Feb­ru­ary 5, 2015,” Mr. Chaf­fetz wrote.


    In his let­ter, Mr. Chaf­fetz said he is par­tic­u­lar­ly inter­est­ed in “how the FCC com­mu­ni­cat­ed with the White House and oth­er Exec­u­tive Branch agen­cies.”

    He also request­ed a brief­ing on the issue with­in two weeks. The com­mis­sion plans to vote on the pro­pos­al Feb. 26.

    Oth­er Repub­li­cans in Con­gress had already expressed con­cerns about the FCC pro­pos­al. The chair­man of the House com­mit­tee that over­sees the FCC, Rep. Fred Upton (R., Mich.), not­ed that Mr. Wheel­er him­self said in Novem­ber that the agency was inde­pen­dent. “Turns out that wasn’t the case then, it’s not the case now, and the White House needs to get its hands off the FCC,” he said Thurs­day.

    Senior FCC offi­cials said Wednes­day that reclas­si­fy­ing broad­band puts the new rules on much firmer ground in the face of a legal chal­lenge from the broad­band indus­try.

    But the broad­band indus­try and con­ser­v­a­tives strong­ly opposed chang­ing how broad­band is clas­si­fied, argu­ing it would sad­dle the indus­try with out­dat­ed reg­u­la­tions and depress invest­ment in upgrad­ing net­works.<

    Mr. Wheeler’s pro­pos­al would apply the por­tion of the law used to reg­u­late com­mon car­ri­ers to broad­band providers, but with­out invok­ing all of the rules designed for the old land­line phone net­work. He specif­i­cal­ly said the FCC wouldn’t reg­u­late broad­band prices, or force providers to lease capac­i­ty on their net­works to com­peti­tors.

    But those assur­ances were of lit­tle com­fort to the broad­band indus­try. An indus­try offi­cial said the FCC plan would give the agency the author­i­ty to reg­u­late prices, allow­ing future com­mis­sion­ers to do so if they choose.


    Con­ser­v­a­tives in Con­gress agreed. “The pres­i­dent gave a speech demand­ing that the FCC seize con­trol of the Inter­net and treat it as a gov­ern­ment-reg­u­lat­ed util­i­ty. The FCC prompt­ly turned around and behaved like an agency of the White House,” Sen. Ted Cruz (R., Texas), a mem­ber of the Sen­ate Com­merce Com­mit­tee, said in an inter­view.

    He said that if the Inter­net is reg­u­lat­ed like a util­i­ty “large cor­po­ra­tions with armies of lob­by­ists will ben­e­fit and small star­tups will be hurt.”

    The broad­band indus­try offi­cial expressed con­fi­dence that the FCC’s rules would even­tu­al­ly be reversed, either by the courts or a future FCC.

    Con­gres­sion­al repub­li­cans say they are par­tic­u­lar­ly upset because they have been work­ing on leg­is­la­tion that would achieve the same goals Mr. Wheel­er has laid out for broad­band regulation—that the com­pa­nies can­not favor or dis­crim­i­nate against cer­tain kinds of con­tent they deliv­er to con­sumers for pay­ment.

    The dif­fer­ence is that the Repub­li­can plan would­n’t reclas­si­fy broad­band as a util­i­ty under telecom­mu­ni­ca­tions law, as Mr. Wheel­er would do. Net-neu­tral­i­ty sup­port­ers say the Repub­li­can draft bill as it stands would gut the FCC’s abil­i­ty to reg­u­late broad­band providers on any­thing besides dis­crim­i­na­tion.

    As Ted Cruz warns, if the Inter­net is reg­u­lat­ed like a util­i­ty “large cor­po­ra­tions with armies of lob­by­ists will ben­e­fit and small star­tups will be hurt.” Which is, of course, why the tele­com giants’ army of lob­by­ists spent years lob­by­ing against net neu­tral­i­ty. They were clear­ly wor­ried about all the dam­age they would do to small busi­ness­es if net neu­tral­i­ty passed. How noble.

    And it’s not a nobil­i­ty exclu­sive to the Amer­i­can tele­com giants. Europe’s tele­com indus­try is also very clear­ly wor­ried about all the abus­es it would inflict on small busi­ness­es if the EU’s net neu­tral­i­ty pro­pos­als come into law. Or some­thing like that:

    Europe’s tele­coms heavy­weights call for lighter ‘net neu­tral­i­ty’ rules

    By Julia Fioret­ti

    BRUSSELS Mon Jan 26, 2015 12:49pm EST

    (Reuters) — The Euro­pean Union should not force tele­coms oper­a­tors to treat all the traf­fic on their net­works equal­ly as it crafts rules on “net neu­tral­i­ty”, sev­er­al indus­try bod­ies said on Mon­day.

    The reac­tion comes a week after Latvia, which holds the rotat­ing Euro­pean pres­i­den­cy, tabled a com­pro­mise text on net neu­tral­i­ty, the prin­ci­ple that all inter­net traf­fic should be treat­ed equal­ly, under which tele­coms oper­a­tors would face strict rules on when they can inter­vene to man­age traf­fic.

    Four indus­try bod­ies rep­re­sent­ing the likes of Voda­fone (VOD.L), Alca­tel-Lucent (ALUA.PA), Orange (ORAN.PA) and Lib­er­ty Glob­al (LBTYA.O) called on the EU to allow them man­age inter­net traf­fic to meet the dif­fer­ent needs of all con­sumers.

    “It is not tech­no­log­i­cal­ly effi­cient or ben­e­fi­cial for con­sumers if all traf­fic is treat­ed equal­ly. Nor has this ever been the case,” the let­ter, seen by Reuters and signed by ETNO, Cable Europe, the GSMA and Make The Net­Work, says.

    Under the Lat­vian pro­pos­al, inter­net ser­vice providers would be oblig­ed to treat all traf­fic equal­ly, except when their net­works face “excep­tion­al ... con­ges­tion”, or they are ordered to block some con­tent by a court, or they need to inter­vene to ensure the secu­ri­ty of the net­work.

    Providers would also be free to offer spe­cial­ized ser­vices, typ­i­cal­ly at high­er speed and guar­an­teed qual­i­ty, as long as broad­er inter­net access is not impaired.

    Tele­coms firms say the abil­i­ty to offer spe­cial­ized ser­vices is key to inno­va­tion in the dig­i­tal sec­tor, such as in the areas of con­nect­ed cars and e‑health, and that strict rules would only sti­fle that.

    But sup­port­ers of net neu­tral­i­ty counter that if left unreg­u­lat­ed, spe­cial­ized ser­vices could crowd out oth­er con­tent and degrade the qual­i­ty of the Inter­net.

    U.S. Pres­i­dent Barack Oba­ma has come out in favor of strict net neu­tral­i­ty rules in the Unit­ed States and said oper­a­tors should be banned from offer­ing paid “fast lane” deals with con­tent com­pa­nies, for exam­ple Net­flix (NFLX.O).


    While the EU tele­com giants are clear­ly con­cerned about a New Net Neu­tral­i­ty Nor­mal emerg­ing this year, note the fine print:

    “Under the Lat­vian pro­pos­al, inter­net ser­vice providers would be oblig­ed to treat all traf­fic equal­ly, except when their net­works face “excep­tion­al ... con­ges­tion”, or they are ordered to block some con­tent by a court, or they need to inter­vene to ensure the secu­ri­ty of the net­work”.

    Providers would also be free to offer spe­cial­ized ser­vices, typ­i­cal­ly at high­er speed and guar­an­teed qual­i­ty, as long as broad­er inter­net access is not impaired.

    Yes, under the new EU net neu­tral­i­ty pro­pos­al on the table, the tele­com indus­try will be allowed to offer “spe­cial­ized ser­vices” as long as the broad­er inter­net access isn’t impaired. Also, if their net­works are impaired (i.e. “excep­tion­al­ly” con­gest­ed) they’ll be allowed to no longer abide by the net neu­tral­i­ty rules and can start pick­ing and choos­ing how they treat dif­fer­ent types of traf­fic.

    So it will be espe­cial­ly inter­est­ing to see how the EU tele­com providers and their reg­u­la­tors respond when the net­works are near­ing max­i­mum capac­i­ty. They can’t nec­es­sar­i­ly bor­row from the “spe­cial­ized ser­vices” band­with. You don’t want your telemed­i­cine traf­fic get­ting throt­tled because the lat­est must-stream movie came out and caused “excep­tion­al” con­ges­tion on all the “non-spe­cial­ized” traf­fic.

    At the same time, how much incen­tive is there’s going to be for the tele­com to expand their “non-spe­cial­ized” net­work capac­i­ty when they can just start throt­tling back when it gets excep­tion­al­ly bad? Espe­cial­ly if a grow­ing num­ber of the most pop­u­lar ser­vices, like stream­ing video, get to even­tu­al­ly fall under the “spe­cial­ized” cat­e­go­ry. Recall that Angela Merkel sug­gest­ed that the “spe­cial­ized ser­vices” should be allowed to include stream­ing video ser­vices. Will hav­ing net­work traf­fic capac­i­ty con­stant­ly on the verge of “excep­tion­al­ly” over­load start mak­ing busi­ness sense if Net­flix can be declared a “spe­cial­ized ser­vice” (with pre­mi­um prices)?

    And what if there’s a loop­hole in the net neu­tral­i­ty rules where any ser­vice offer that only pro­vides access to one par­tic­u­lar part of the inter­net (like Face­book) does­n’t fall under the rules for inter­net appli­ca­tion ser­vices that man­date the equal treat­ment of all traf­fic? How might such a loop­hole impact the invest­ments the tele­com indus­try makes in the non-spe­cial­ized main­stream inter­net? It’s a ques­tion worth ask­ing since such a loop­hole might end up in the final EU net neu­tral­i­ty leg­is­la­tion:

    Nor­we­gian Com­mu­ni­ca­tion Author­i­ties

    On the ori­gin of spe­cialised ser­vices

    Last update 29/12/2014

    Spe­cialised ser­vices are a main top­ic in the impor­tant debate about net neu­tral­i­ty in Europe. Yet how are we to under­stand this con­cept? What does it mean in prac­tice? Which spe­cif­ic ser­vices does it refer to? While look­ing for answers to these ques­tions, we get to the very core of the dis­cus­sion: how spe­cialised ser­vices relate to the Inter­net.

    By Frode Sørensen, Senior Advi­sor at the Nor­we­gian Post and Telecom­mu­ni­ca­tions Author­i­ty

    To start with the prac­ti­cal side of the dis­cus­sion: these ser­vices already exist today. They con­sist of tra­di­tion­al ser­vices that have migrat­ed to IP tech­nol­o­gy, such as facil­i­ties-based VoIP and IPTV. How­ev­er, they can also be used to pro­vide new ser­vices, and e‑health seems to be the most promi­nent exam­ple that is being high­light­ed by stake­hold­ers.

    The actu­al def­i­n­i­tion of spe­cialised ser­vices is impor­tant, as it does not include Inter­net-based appli­ca­tions that are increas­ing­ly used as a sub­sti­tute for tra­di­tion­al ser­vices. Such Inter­net-based appli­ca­tions are often termed “over-the-top” and include such things as peer-to-peer tele­pho­ny (e.g. Skype) and video stream­ing.

    The “over-the-top” phrase indi­cates that there are two lay­ers: the appli­ca­tion lay­er and the net­work lay­er. The appli­ca­tion lay­er is placed on top of and clear­ly sep­a­rat­ed from the net­work lay­er, which facil­i­tates the devel­op­ment and deploy­ment of new appli­ca­tions. This is the basis for the enor­mous inno­va­tion in con­tent and appli­ca­tions on the Inter­net that we have wit­nessed in recent years.

    But where does the term “spe­cialised ser­vices” come from?

    The begin­ning

    Tim Wu intro­duced the “net neu­tral­i­ty” con­cept more than ten years ago, and in 2005 Fed­er­al Com­mu­ni­ca­tions Com­mis­sion (FCC) launched its open Inter­net prin­ci­ples. These two events can be seen as the very first steps in the devel­op­ment of a net neu­tral­i­ty pol­i­cy, though the essence of net neu­tral­i­ty could already be found in the Inter­net’s under­ly­ing func­tion­ing.

    The Nor­we­gian Com­mu­ni­ca­tions Author­i­ty (Nkom) was the first in Europe to estab­lish a reg­u­la­to­ry plat­form for net neu­tral­i­ty. Nkom based its work on co-reg­u­la­tion, and Nor­we­gian guide­lines for net neu­tral­i­ty were intro­duced in Feb­ru­ary 2009. These guide­lines implic­it­ly dis­cuss spe­cialised ser­vices and state that “if the phys­i­cal con­nec­tion is shared with oth­er ser­vices, it must be clear how the capac­i­ty is allo­cat­ed between the Inter­net traf­fic and the oth­er services”.1

    In Octo­ber 2009, FCC pub­lished a Notice of Pro­posed Rule­mak­ing, and in Decem­ber 2009 FCC intro­duced rules for pre­serv­ing a free and open Inter­net. These two doc­u­ments explic­it­ly address spe­cialised ser­vices, but do not define the term. How­ev­er, the lat­ter doc­u­ment refers to “spe­cial­ized ser­vices, such as exist­ing facil­i­ties-based VoIP”.2

    Net neu­tral­i­ty was intense­ly debat­ed dur­ing the polit­i­cal process that led to a revised Euro­pean reg­u­la­to­ry frame­work in Decem­ber 2009. The frame­work aims to pro­mote com­pe­ti­tion among ser­vice providers, and with regard to net neu­tral­i­ty, trans­paren­cy is empha­sised as a tool to enable end users to switch providers when nec­es­sary.

    BEREC’s def­i­n­i­tions

    In 2010, BEREC estab­lished its Net Neu­tral­i­ty Expert Work­ing Group that was to study prac­ti­cal meth­ods for the appli­ca­tion of the net neu­tral­i­ty pro­vi­sions of the Euro­pean reg­u­la­to­ry frame­work. Due to the empha­sis placed on trans­paren­cy in the frame­work, the first report from the group was “Guide­lines on trans­paren­cy in the scope of net neu­tral­i­ty”, close­ly fol­lowed by “Frame­work for qual­i­ty of ser­vice in the scope of net neu­tral­i­ty”.

    The Frame­work for qual­i­ty of ser­vice rep­re­sents BEREC’s first step in the analy­sis of Arti­cle 22(3) of the Uni­ver­sal Ser­vice Direc­tive on the pre­ven­tion of ser­vice degra­da­tion. The report intro­duces main cat­e­gories of ser­vice offers that ought to be con­sid­ered by reg­u­la­tors when assess­ing the net neu­tral­i­ty sit­u­a­tion in the mar­ket: Inter­net access ser­vices and spe­cialised ser­vices, two ser­vices that share capac­i­ty on the end-user’s broad­band con­nec­tion, also referred to as “the two lanes”.

    The Guide­lines for qual­i­ty of ser­vice in the scope of net neutrality3 came in 2012, and intro­duced def­i­n­i­tions for the ser­vice cat­e­gories. The Guide­lines pre­sent­ed a com­plete ser­vice mod­el for reg­u­la­to­ry assess­ment of net neu­tral­i­ty. The Inter­net access ser­vice is defined as a ser­vice that pro­vides con­nec­tiv­i­ty to the Inter­net, while spe­cialised ser­vices are pro­vid­ed over vir­tu­al or phys­i­cal net­works dis­tinct from net­works con­sti­tut­ing the Inter­net, but that will typ­i­cal­ly oper­ate over the same infra­struc­ture.


    EU leg­is­la­tion

    When on 11 Sep­tem­ber 2013 the Euro­pean Com­mis­sion pub­lished its pro­pos­al for a Reg­u­la­tion to achieve a “Con­nect­ed Con­ti­nent”, the reg­u­la­to­ry goal of pro­mot­ing net neu­tral­i­ty was pro­posed con­vert­ed to a “free­dom” for Inter­net users. The pro­pos­al con­tained net neu­tral­i­ty pro­vi­sions acknowl­edg­ing a ser­vice mod­el con­sist­ing of the Inter­net access ser­vice and spe­cialised ser­vices.

    In BEREC’s state­ment on the pro­pos­al, we read that: “BEREC wel­comes the Commission’s acknowl­edg­ment of the exis­tence of spe­cialised ser­vices along­side and dis­tinct from inter­net access ser­vices (IAS). How­ev­er, BEREC believes the rel­e­vant def­i­n­i­tion does not ade­quate­ly cap­ture their pro­vi­sion with­in closed net­works and so risks hin­der­ing NRAs’ capac­i­ty to apply open Inter­net stan­dards to IAS and to deter­mine the accept­able rela­tion­ship between IAS and spe­cialised services.“4

    After exten­sive dis­cus­sion in the com­mit­tees of the Euro­pean Par­lia­ment, the vote dur­ing the ple­nary meet­ing on 3 April 2014 result­ed in the adop­tion of sev­er­al net neu­tral­i­ty pro­vi­sions that strength­ened the def­i­n­i­tions of the two ser­vice cat­e­gories. The word­ing of a num­ber of arti­cles was amend­ed, to some extent in line with BEREC’s sug­ges­tions.

    BEREC express­es sup­port for the Euro­pean Par­lia­men­t’s work on pro­mot­ing the prin­ci­ple of net neu­tral­i­ty, and clar­i­fies in regard to the ser­vice mod­el that “BEREC con­sid­ers that spe­cialised ser­vices should be clear­ly sep­a­rat­ed (phys­i­cal­ly or vir­tu­al­ly) from inter­net access ser­vices at the net­work lay­er, to ensure that suf­fi­cient safe­guards pre­vent degra­da­tion of the inter­net access services.“5

    This is where the case stands after the Par­lia­ment debat­ed it.

    Poten­tial for improve­ment

    The next step of the polit­i­cal process is the han­dling in the Coun­cil. As we have seen, there still appears to be a need for fur­ther improve­ments to the net neu­tral­i­ty pro­vi­sions. The “spe­cialised ser­vices” con­cept is now well-known among politi­cians, and with the help of an even bet­ter clar­i­fi­ca­tion of the def­i­n­i­tion, this can be made into a pre­cise and enforce­able reg­u­la­to­ry tool.

    There is also room for improve­ment in regard to the def­i­n­i­tion of the Inter­net access ser­vices. Any ser­vice offers that pro­vide access to a part of the Inter­net (e.g. lim­it­ed to just Face­book) will not be cov­ered by the cur­rent def­i­n­i­tions. Remov­ing such loop­holes in the text of the reg­u­la­tions can pre­vent reg­u­la­to­ry uncer­tain­ty.

    The ser­vice mod­el with the two ser­vice cat­e­gories has been devel­oped to pro­vide a bal­anced approach to net neu­tral­i­ty. The mod­el both pro­tects net neu­tral­i­ty for Inter­net-based appli­ca­tions whilst allow­ing alter­na­tive approach­es to qual­i­ty of ser­vice and busi­ness mod­els for spe­cialised ser­vices. As spe­cialised ser­vices are exempt­ed from net neu­tral­i­ty, it is espe­cial­ly impor­tant that the spe­cialised ser­vices are clear­ly sep­a­rat­ed from the Inter­net access ser­vices, so as to ensure that Inter­net traf­fic is not degrad­ed.


    The Body of Euro­pean Reg­u­la­tors of Elec­tron­ic Com­mu­ni­ca­tions (BEREC), made it pret­ty clear with their find­ings that spe­cial­ized ser­vices and inter­net appli­ca­tion ser­vices need to be either phys­i­cal­ly or vir­tu­al­ly sep­a­rat­ed in order to “pre­vent degra­da­tion of the inter­net access ser­vices.” And that cer­tain­ly makes sense although the “vir­tu­al” sep­a­ra­tion sounds like an invi­ta­tion for dynam­ic co-min­gling of spe­cial­ized and non-spe­cial­ized ser­vices that could dis­cour­age fur­ther invest­ments in over­all band­width (since they could just real­lo­cate band­width from the non-spe­cial­ized ser­vices over to the spe­cial­ized ser­vices if the spe­cial­ized ser­vice band­width is hit­ting its limit...as long as the non-spe­cial­ized traf­fic isn’t “excep­tion” clogged).

    But keep in mind that a loop­hole:

    There is also room for improve­ment in regard to the def­i­n­i­tion of the Inter­net access ser­vices. Any ser­vice offers that pro­vide access to a part of the Inter­net (e.g. lim­it­ed to just Face­book) will not be cov­ered by the cur­rent def­i­n­i­tions

    So will your ISP be able to offer you a Face­book-only ser­vice with traf­fic that’s exempt from the net neu­tral­i­ty rules while offer­ing a sep­a­rate ser­vice that cov­er the rest of the inter­net? Does­n’t that mean any sin­gle web­site, no mat­ter how inte­grat­ed its con­tent is into the rest of the inter­net, could be con­sid­ered some­thing anal­o­gous to a “spe­cial­ized ser­vice”? How does that make any sense? And yet it kind of sounds like that’s the loop­hole in place(unless it’s already been removed). And if that’s the case, the future of the inter­net could become odd­ly retro (The dead shall rise again).

    Of course, many of these con­cerns over the fate of the EU dig­i­tal ecosys­tem might be moot if one assumes exten­sive com­pe­ti­tion remains in the EU tele­com sec­tor and it does­n’t and up col­laps­ing into a US-style oli­gop­oly. Good luck with that!

    Posted by Pterrafractyl | February 7, 2015, 5:56 pm
  10. With the Comcast/Time Warn­er merg­er unfor­tu­nate­ly still under con­sid­er­a­tion, here’s a reminder that, despite the many valid argu­ments against allow­ing the cre­ation of a media super-giant, they aren’t all valid:

    Nation­al Jour­nal
    Repub­li­can Fears Com­cast Will Crack Down on Con­ser­v­a­tive Media
    The cable giant’s pow­er would only grow with the Time Warn­er Cable deal.
    By Bren­dan Sas­so

    April 9, 2014
    Sen. Mike Lee is wor­ried that Com­cast, which owns NBC-Uni­ver­sal, could dis­crim­i­nate against con­ser­v­a­tive media out­lets.

    “Con­sid­er­ing the well-known polit­i­cal lean­ings of NBC, I’ve heard con­cern that Com­cast might have the incen­tive and the abil­i­ty to dis­crim­i­nate against cer­tain polit­i­cal con­tent, includ­ing for exam­ple con­ser­v­a­tive con­tent,” Lee, a Utah Repub­li­can, said Wednes­day dur­ing a Sen­ate Judi­cia­ry Com­mit­tee hear­ing on Com­cast’s planned pur­chase of Time Warn­er Cable.

    “And that capac­i­ty could be sig­nif­i­cant­ly enhanced as a result of this trans­ac­tion,” the sen­a­tor warned.


    The Fed­er­al Com­mu­ni­ca­tions Com­mis­sion used to have rules that barred cable TV providers from con­trol­ling more than 30 per­cent of the mar­ket. The courts have thrown out those rules, but Cohen argued that the fact that Com­cast will still come under the cap is a “com­pelling argu­ment” that there should­n’t be a con­cern about unfair mar­ket pow­er.

    But Gene Kim­mel­man, the head of con­sumer advo­ca­cy group Pub­lic Knowl­edge, argued that Com­cast’s own­er­ship of NBC gives the provider an incen­tive to dis­crim­i­nate against com­pet­ing TV chan­nels.

    James Bosworth, CEO of the cable golf chan­nel Back9Network, also expressed con­cern about Com­cast’s pow­er to drop TV chan­nels that would hurt NBC-Uni­ver­sal prop­er­ties. The com­pa­ny owns its own golf-focused net­work, the Golf Chan­nel.

    In addi­tion to pro­vid­ing cable TV ser­vice, Com­cast and Time Warn­er Cable are also the nation’s biggest broad­band Inter­net providers.

    To receive per­mis­sion to buy NBC-Uni­ver­sal in 2011, Com­cast agreed to abide by the FCC’s net-neu­tral­i­ty rules. Those reg­u­la­tions require Inter­net ser­vice providers to pro­vide equal access to all web­sites. Because a fed­er­al court struck down those rules ear­li­er this year, Com­cast is the only provider that is still barred from block­ing or slow­ing down any web­sites (includ­ing con­ser­v­a­tive ones).

    Despite that oblig­a­tion, which expires in 2018, Kim­mel­man warned that Com­cast will become a gate­keep­er with unprece­dent­ed con­trol over the Inter­net.

    Now, giv­en the size of the new Com­cast-Time Warn­er behe­moth and the fact that the new com­pa­ny both cre­ates and dis­trib­utes con­tent, con­cerns about how that mar­ket pow­er might be abused are per­fect­ly rea­son­able. But con­cerns that Com­cast-Time Warn­er might be biased against Repub­li­cans? Uh....that’s prob­a­bly not going to be a prob­lem:

    The Dai­ly Beast
    After MSNBC Axes Ronan Far­row and Joy Rei­d’s Shows, Is Chris Hayes Next?
    As its after­noon shows host­ed by Ronan Far­row and Joy Reid are can­celed due to poor rat­ings, MSNBC is report­ed­ly plan­ning to replace Chris Hayes with Rachel Mad­dow.

    Lloyd Grove

    It was hard­ly a sur­prise Thurs­day when rat­ings-chal­lenged MSNBC announced the can­cel­la­tion of the poor-per­form­ing after­noon pro­grams host­ed by Ronan Far­row and Joy Reid after less than a year, with vet­er­an news anchor Thomas Roberts step­ping in to pre­side over the two-hour block from 1 p.m. to 3 p.m.

    Until a per­ma­nent replace­ment is named for Roberts’s 5:30 a.m. pro­gram Way Too Ear­ly, the 6 a.m. Morn­ing Joe hosts Joe Scar­bor­ough and Mika Brzezin­s­ki will tem­porar­i­ly take up the slack by start­ing a half-hour ear­li­er.

    But accord­ing to knowl­edge­able sources at the Com­cast-owned cable net­work, Thursday’s moves were only the open­ing sal­vo in a wider pro­gram­ming shake­up.

    In the rel­a­tive­ly near term, two well-placed sources pre­dict­ed to The Dai­ly Beast, Chris Hayes will be relieved of his weak-per­form­ing 8 p.m. show All In, to be replaced by the cur­rent 9 p.m. host of The Rachel Mad­dow Show, while a tal­ent search is cur­rent­ly under­way to fill the prime-time slot to be vacat­ed by Mad­dow.

    An MSNBC spokesperson—who tried put a hap­py face on the demo­tions with talk of prime-time spe­cials and “mul­ti­plat­form” nation­al report­ing for the still-employed Far­row and Reid–declined to com­ment on the Hayes-Mad­dow sce­nario.

    In the longer term, these sources said, the Rev. Al Sharpton—a larg­er than life per­son­al­i­ty who attracts a 35 per­cent African-Amer­i­can audi­ence but con­tin­ues, after 3½ years of night­ly prac­tice, to wres­tle with his Teleprompter–could even­tu­al­ly be moved from his week­night 6 p.m. slot to a week­end time peri­od, as MNSBC Pres­i­dent Phil Grif­fin attempts to reverse sig­nif­i­cant view­er­ship slides by accen­tu­at­ing straight news over left-lean­ing opin­ion.

    “Every­body in the food chain from top to bot­tom under­stands that the Olber­mann era is over,” said an MSNBC source, refer­ring to the glo­ry days dur­ing George W. Bush’s admin­is­tra­tion when incen­di­ary lib­er­al Kei­th Olber­mann reg­u­lar­ly attract­ed a mil­lion viewers—many of them seek­ing refuge from White House and Repub­li­can talk­ing points.

    The MSNBC source said, “Going left was a bril­liant strat­e­gy while it last­ed and made hun­dreds of mil­lions of dol­lars for Com­cast, but now it doesn’t work any more...The goal is to move away from left-wing TV.”

    Olber­mann, who these days hosts a sports pro­gram on ESPN, made his bones by blis­ter­ing Bush and feud­ing with Fox News star Bill O’Reilly—the No. 1 rat­ed cable news personality–and acri­mo­nious­ly depart­ed from MSNBC in Feb­ru­ary 2011 for for­mer Vice Pres­i­dent Al Gore’s Cur­rent TV, from which he was fired a year lat­er.

    Griffin–who has been forced to deal with a num­ber of awk­ward per­son­nel issues dur­ing his 7‑year lead­er­ship of the cable out­let, notably the fir­ings of Mar­tin Bashir and Alec Bald­win for ugly ver­bal spewings—had high hopes for Far­row and Reid last year when he insert­ed their shows into the day­time line­up.

    “I’m con­fi­dent the changes and addi­tions to our line­up will strength­en the flow of our pro­gram­ming,” Grif­fin wrote in a staff memo herald­ing their arrival last year.

    In an inter­view with The Dai­ly Beast, he was clear­ly smit­ten with Far­row, the son of Mia Far­row and Woody Allen (or Frank Sina­tra, depend­ing), then a pre­co­cious 26-year-old who was large­ly untest­ed on cam­era.


    Still, for all its rat­ings trou­bles, MSNBC remains a reli­able mon­ey-mak­er for Com­cast, since much of its rev­enue is gen­er­at­ed not by view­er­ship but by cable sub­scrip­tion fees.


    Yes, Com­cast has plans for chang­ing the polit­i­cal ori­en­ta­tion of the cable news land­scape, but they aren’t exact­ly plans the GOP needs to be wor­ry­ing about:

    The MSNBC source said, “Going left was a bril­liant strat­e­gy while it last­ed and made hun­dreds of mil­lions of dol­lars for Com­cast, but now it doesn’t work any more...The goal is to move away from left-wing TV.

    It’s worth not­ing that NBC Uni­ver­sal CEO, Steve Burke, was not only one of George W. Bush’s fundrais­ing “Rangers”, he is also the son of Daniel Burke, co-chief of Cap­i­tal Cities dur­ing the rise of Bill Casey. Before the NBC Universal/Comcast merg­er Steve was the COO of Com­cast. And that’s all part of why it was prob­a­bly always just a mat­ter of time before Com­cast decid­ed to either kill the net­work out­right or just com­plete­ly depoliti­cize it to the point where vir­tu­al­ly all of the com­men­tary crit­i­cal com­men­tary of the GOP is oli­garchs is stripped out and replaced with more news about the weath­er or some­thing.

    It’s also worth not­ing that the guy lead­ing this change up at MSNBC, Phil Grif­fin, had words about turn­ing his net­work into Fox dur­ing the last MSNBC shake­up that have sud­den­ly become rather omi­nous in light of recent reports.:

    The Dai­ly Beast
    Ban­ter With The Beast: MSNBC’s Head Hon­cho Phil Grif­fin on Admir­ing Roger Ailes and More
    He just shook up the network’s day­time sched­ule with two new hires. Lloyd Grove chats with the man in charge about his cohorts, com­peti­tors and com­pan­ions.

    Lloyd Grove

    Phil Griffin’s legs are bounc­ing rapid­ly up and down, as though he’s pos­sessed by a caged bird fran­ti­cal­ly try­ing to break free and take flight.

    “I’ve got to stop that. Every­body writes about that,” says the pres­i­dent of MSNBC, coiled behind a design­er desk in his sleek, sun-dap­pled cor­ner office on the third floor of Rock­e­feller Cen­ter. “I’m always churn­ing.”

    The 57-year-old Grif­fin, who favors zip­pered exer­cise jack­ets over a stan­dard-issue coat and tie, is a sports nut who fre­quents the gym and jogs in Cen­tral Park. He has toiled at NBC News and var­i­ous sis­ter out­lets since 1984, when, in his first month as a bud­ding pro­duc­er, he acci­den­tal­ly scored a direct hit on a sur­prised John Chan­cel­lor while toss­ing a foot­ball dur­ing a pick­up game being waged in an office cor­ri­dor.

    “Not well,” he says rue­ful­ly when I ask how the dis­tin­guished for­mer Night­ly News anchor­man react­ed. “He didn’t quite have the sense of humor I thought he might.”

    Griffin’s under­car­riage trem­bles at the memory—or maybe he’s sim­ply churn­ing again.

    The lat­est man­i­fes­ta­tion of Griffin’s churn is the sec­ond-place cable network’s fresh­ly recon­fig­ured day­time sched­ule, in which he has shuf­fled a cou­ple of his estab­lished anchors—Andrea Mitchell and Tam­ron Hall—to make room for new blood. Griffin’s two new hires, Ronan Far­row and Joy Reid, are bright and telegenic per­son­al­i­ties, but large­ly unproven as view­er draws, who will launch their hour-long pro­grams at 1 p.m. and 2 p.m., respec­tive­ly, on Feb. 24.


    In his office Grif­fin insists: “I think we’ve nev­er had an ide­ol­o­gy. An ide­ol­o­gy is a sin­gle thought across all pro­grams. We’ve nev­er had that.” As evi­dence, he men­tions the spir­it­ed on-air debates in 2010, pro and con, con­cern­ing whether the Bush tax cuts should be allowed to expire. “Obvi­ous­ly I hire peo­ple who fit the sen­si­bil­i­ty,” Grif­fin says. “We do stay true to facts. You have to build your argu­ment. That’s why I call it a sen­si­bil­i­ty.”

    He con­tin­ues: “If you’re a Demo­c­rat in trou­ble, we’re not a place where we’re going to reha­bil­i­tate you. You’re not going to get a free ride if you did wrong.” As evi­dence that the cable out­let is by no means a White House shill, Grif­fin men­tions Ed Schultz’s impas­sioned crit­i­cisms of the Oba­ma administration’s trade poli­cies, and var­i­ous MSNBC hosts’ more gen­er­al con­dem­na­tion of Obama’s use of dead­ly drones in Afghanistan and Pak­istan.


    Of course, there are notable excep­tions to the pre­vail­ing cen­ter-left zeit­geist: Morn­ing Joe, the pan­el and inter­view show in which for­mer Repub­li­can con­gress­man Joe Scar­bor­ough and broad­cast vet­er­an Mika Brzezin­s­ki, daugh­ter of Jim­my Carter’s nation­al secu­ri­ty advis­er, pre­side over a mul­ti-par­ty con­ver­sa­tion about the day’s devel­op­ments; and The Dai­ly Run­down, in which Chuck Todd, NBC News’s down-the-mid­dle White House cor­re­spon­dent and polit­i­cal direc­tor, grills Wash­ing­ton play­ers and pro­vides can­ny analy­sis of their aims and moti­va­tions.

    As for Fox News, “I think they do have an ide­ol­o­gy,” Grif­fin says, “because every Repub­li­can who’s in trou­ble goes on that net­work to be tak­en care of…They’re owned by News Corp., which is Rupert Mur­doch. Roger Ailes runs it, and he comes out of the Repub­li­can Par­ty.” Grif­fin adds: “That’s fine. They’ve done an incred­i­ble job over there. They’ve been very suc­cess­ful. They dri­ve a lot of the con­ver­sa­tion.”

    What if an angel descend­ed from the cable tele­vi­sion fir­ma­ment and whis­pered in Griffin’s ear: “Phil, if you just change MSNBC’s sen­si­bil­i­ty to ‘right-wing Repub­li­can,’ you’ll make a bil­lion dol­lars a year like Fox”? How would he respond?

    “I don’t believe the angel’s com­ing to me—so I don’t have to deal with that answer,” Grif­fin says with laugh. How­ev­er, he can’t resist adding: “It’s pret­ty obvi­ous what you might do.” Pre­sum­ably, fol­low the angel’s pru­dent advice.


    “It’s pret­ty obvi­ous what you might do.” Omi­nous!

    Still, it was nice to see that Sen­a­tor Mike Lee is actu­al­ly think­ing about issues like how to ensure the pub­lic does­n’t find its access to news and infor­ma­tion under the com­plete con­trol of a hand­ful of enti­ties that are out to push an agen­da of their own. Espe­cial­ly since Lee is indi­rect­ly mak­ing the case for strong net neu­tral­i­ty laws since one of the biggest fears of a fail­ure to pass net neu­tral­i­ty laws is that tele­coms will have the option to choose which web­sites should be sped up or slowed down. So it was nice of Lee to express such con­cerns, although not nice enough.

    Posted by Pterrafractyl | February 20, 2015, 12:11 am

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