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October 16, 2006

Online Discussion

Mike McCurry, co-chairman of Hands off the Internet, a coalition of telecommunication-related businesses, and Ben Scott, policy director of the nonpartisan public interest organization Free Press and representative of SaveTheInternet.com, answered these question as a start to their post-broadcast discussion.

(Please remember to refresh often to see new posts, and note that you may need to preview your message in order for it to post to the discussion.)

1. Last year, the FCC eliminated the net neutrality rules and replaced them with principles. To date, what have been the real world consequences of that action? And what are the potential long term consequences of that action?

Mike McCurry responds:

That’s a good question because from the consumers’ perspective, the real-world consequence has been: Absolutely nothing. Zero. Zilch. That’s why these black-helicopter scenarios from neutrality advocates that “sometime in the future” there might be different levels of service on the Net are so questionable.

Look, let’s remember that consumers still enjoy vast legal protections to access the content of their choice. First, the FCC has put forward four principles for online neutrality and all the major broadband providers have pledged to uphold them. Second, you also have state and federal laws against things like tortuous interference, unfair competition and antitrust. And finally, you have the FCC itself saying that if there is discrimination against consumers, it has authority to take action.

In fairness to Bill Moyers, someone I admire greatly, that is why regulation of the public Internet is totally unlike the railroads and oil pipelines of the 19th century – we have anti-trust protections and government regulatory bodies like the FCC that we did not have then.

As a Democrat, I am the first to insist that we use the tool of government when needed but I think we proved in the 1990s that we are better off when we use that tool wisely. The advocates of the first major government regulation of the internet – those who want mandated net neutrality – are unwilling to consider the unforeseen consequences of asking the federal government to come in to regulate the infrastructure of the internet.

That’s why this neutrality regulation debate misses the point for most consumers. America is ranked between 12th and 19th in the world in terms of access to high-speed Internet services, depending on the survey. That low ranking is partly because we still try to apply the 20th century regulations governing telephony to the internet. The advocates of net neutrality are trying to put the rules that governed telephones on to the web. That ought to make everyone think twice. We ought to be focused on doing everything possible to encourage more, and more affordable, broadband deployment and to allow technology to prosper and advance and make the operations of networks more efficient.

Even the advocates of net neutrality, like Ben Scott, cannot tell us what it is – precisely. And I mean “precisely.” Because if we passed the legislation pending in Congress about net neutrality, armies of lawyers and lobbyists ON BOTH SIDES would spend the next 3-5 years trying to make sense of the rulemaking at the FCC’s new “Broadband Bureau” about what constitutes discrimination and degradation of service. Meanwhile, we won’t be making the investments that will give us the Internet that we need to handle the bandwith requirements that are just on the horizon.

Ben Scott responds:

Thanks for inviting me to this discussion. The elimination of Net Neutrality in the summer of 2005 started a major debate over the future of the Internet. Since then, more than a million citizens have come to the defense of the free and open Internet. Millions more may be learning about Net Neutrality for the first time tonight. Hopefully it's the start of a much broader conversation on these crucial issues.

The Internet has always been a neutral platform for communications and commerce. The only reason that we have not seen significant changes yet is that we’re in the middle of a major political battle over this issue; the phone and cable companies have been on their best behavior. But we should all listen very carefully to what their own executives are saying about their plans for the future of the Internet.

If left unchecked, network owners like AT&T, Verizon, BellSouth and Comcast will destroy the greatest engine for democratic participation and economic innovation the world has ever known. This is not speculation. They have told us so, time and again.

The CEOs of the major telephone companies declared in the pages of Business Week, the Washington Post and the Wall Street Journal that they intend to discriminate and create a new business model that transfers value and control over Internet content into their hands. The manufacturers who sell them equipment have already built the software and electronics that will make network discrimination a reality.

In December 2005, the Washington Post reported that William Smith, CTO of BellSouth “told reporters and analysts that an Internet service provider such as his firm should be able, for example, to charge Yahoo Inc. for the opportunity to have its search site load faster than that of Google Inc.” But they won’t stop with Google and Yahoo. They will translate this logic of discrimination onto every Web site on the Internet. FCC Chairman Kevin Martin has publicly declared that he has no problem with this, and that his rules won’t stop them..

The phone and cable companies are spending hundreds of millions of dollars on Washington lobbyists, campaign contributions and PR firms in that Congress will give them the green light to trash the longstanding Net Neutrality principles that have made the Internet what it is today.

The networks claim they would never discriminate against content. Yet they don’t want to see discrimination made illegal. If they aren’t going to block or degrade content, why should they care about regulations? All we’re asking for the return of what we’ve always had— the basic protections for consumers that have always governed the Internet.


2. There’s been a lot of discussion about the potential of the Internet—for business, for communication, for democracy. What effect will the outcome of the net neutrality debate in Washington have on that potential?


Mike McCurry responds:

I think the best answer to this question came from the president of America’s largest communications union. Last May, Larry Cohen, who heads the 700,000-member Communications Workers of America, wrote to Congress in strong opposition to neutrality regulations. He said that if these regulations became law, “investment in the physical infrastructure necessary to provide high-speed Internet will slow down, the U.S. will fall even further behind the rest of the world, and our rural and low-income populations will wait even longer to enter the digital age.” (emphasis mine)

Step back a moment: Cohen represents hundreds of thousands of working men and women who are literally on the front lines of this issue. They know what they’re talking about. So when he says that these neutrality regulations “would delay job-creating high-speed network deployment to the home,” you have to take him seriously.

“Regulating Net equality” may sound nice as a banner, but when you look at its practical effect, you’ll realize pretty quickly that in the real world it makes no sense. Ask yourself: Should Net users who pay $9.95 a month for ESPN films have to contend with a slower connection because others are using BitTorrent to illegally download “The Legend of Ricky Bobby”?


Ben Scott responds:


Net Neutrality protects two fundamental American values: free speech and the free market.

These two values have united the massive coalition of political organizations and businesses that support Net Neutrality.

The reason is simple. A neutral Internet is a network without barriers to entry, without gatekeepers, and without discrimination of any kind. It is open to anyone with a good idea to build an audience or sell a product. We have seen the brilliant success of this model throughout the short history of the Internet. We want to see this success continue.

Eliminating Net Neutrality will undermine innovation, investment and competition. In the words of Internet architect Vint Cerf, the Internet allows “innovation without permission.” Remember that the name Internet brands of today were just “good ideas in garages” a decade ago.

College kids created Google. A hobbyist conceived the idea for eBay. A teenager wrote the code for Instant Messaging. Some of the most popular sites on the Internet right now — MySpace, FaceBook, YouTube — didn’t exist three years ago. None of them would have emerged without Net Neutrality.

This technological revolution keeps turning because the Internet is an unrestricted free marketplace of ideas where innovators rise and fall on their merits. How is it possible that a small group of bloggers, many without a single journalism class, have a combined audience larger than the readership of the New York Times? How is it possible that a company like YouTube could reach so many millions of viewers in 18 months that Google buys them for $1.6 billion? These success stories will only happen on an Internet that is neutral.

The open Internet has proven that the best ideas rarely come from those with the deepest pockets. The network owners want to stifle that creativity by tossing aside Net Neutrality. Imagine the Internet without Network Neutrality. How many venture capitalists would embrace a business plan if the first line reads: “Strike a favorable deal with AT&T”? The engine of ideas and innovation will grind to a halt. The economic cost to the country—say nothing of the democratic costs—would be enormous.


3. Both those in favor of and those against net neutrality regulation argue that they have the best interest of the consumer in mind. Explain why you believe that net neutrality will or will not benefit Internet users.


Mick McCurry responds:


First, it’s unfortunately evident that millions of consumers are already worse off. This “neutrality” debate has stopped progress on legislation in Congress: reform of our outdated cable franchise laws. This issue has support from everyone from Consumers Union to the American Conservative Union. Small wonder: In areas that have more video competition, prices dropped between 28 and 42 percent (Bank of America report, 2006). The bill that is being held hostage by advocates of net neutrality would make it much cheaper, in most parts of the US, to get video services into the home via the Internet. Sooner or later the Netroots will realize they are getting screwed by big company lobbyists on “their” side of the this issue that are holding up pro-consumer reforms.

So the very real benefits that tens of millions of consumers could see every month in lower cable bills have taken a backseat to a “problem” that even advocates admit is not happening anywhere!

From a long-term perspective, the real loser from neutrality regulations will be ordinary Net users. They’ll wind up paying higher access fees because Google, Amazon, eBay and other huge consumers of bandwidth will have a legal loophole to avoid paying for what they consume. Having gamed the system, these companies will be able to push their costs onto Net users.

With broadband roll-out costing $40+ billion, consumers beware!


Ben Scott responds:


The debate over Network Neutrality is, at its base, a decision about who will control the Internet — consumers and content creators in a competitive marketplace, or network owners in an anti-competitive marketplace?

The end of Network Neutrality would mean fundamental, negative changes to the Internet. That’s why every major consumer organization in the nation – Consumers Union, Consumer Federation, U.S. PIRG, etc. -- is publicly committed to meaningful and enforceable Network Neutrality. That means no discrimination against any content based on its ownership or source.

Permitting content discrimination on the Internet for the first time would be a disaster for consumers. On the neutral Internet, consumers have ALL the control over an unlimited selection of content. Giving the network owners gatekeeper control over content takes the decisions away from millions of users and puts it in the hands of a small cartel of telecom executives.

Who will end up in the slow lane? Anyone without the cash or the connections to negotiate fast-lane deals with AT&T or Comcast. Basically, anyone that lacks deep pockets will be pushed aside.

Consumers should choose winners and losers in the content marketplace based on the merits of a Web site or service. Without Net Neutrality the network owners have a strong financial incentive to undermine the free market and overcharge everyone. Any economics 101 student will tell you that a scarcity of choice leads to higher prices for goods. Do you really trust these companies to look after your best interests?

It is virtually impossible to spin this as something positive, though I'm sure our able-penned friend Mr. McCurry will do his best.