Month: June 2006

It’s Not the Press Who is Treasonous

The Bush Administration’s attack on the New York Times is a poisonous and despicable political tactic. It was the Administration—backed by most of Congress—which led us into a war based on lies and deception. They should be held in contempt by the American people for directly causing the loss of so many lives (let alone the daily misfortune of many). Bravo to the New York Times and the few other news outlets courageous enough to keep the American people informed about domestic spying and other surveillance schemes that threaten our civil liberties. The White House has clearly lifted a tactic out of Richard Nixon’s political playbook: the use of Spiro Agnew to help defend another disastrous war–Vietnam. In a much-publicized speech, Agnew attacked the news media as “nattering nabobs of negativism” as part of Nixon’s political counter-offensive. As now, the White House was desperately trying to change the growing public disenchantment with that war. Plus ça change, plus c’est la même chose.

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Sen. Commerce: No “Independence” for the U.S. Net/ Case in Canada Illustrates Dangers with Broadband Gatekeepers

The vote on the new communications “reform” bill in the Senate was a victory for the nation’s communications giants. It sets the stage for the `pay as you surf, download, & post’ digital media system that is the business model for our broadband giants. The phone and cable companies wish to be first in line so they can—in their own words—monetize all digital communications. The reason they oppose network neutrality is simply because it would prevent them from readily tacking on a host of extra charges for both consumers and content providers. A net neutral U.S. Internet would also threaten their ability to ensure that their content—video games, movies, online gambling, etc—receive favorable transport, processing, and promotion. It’s great that so many committee Democrats have finally woken up to the threat (led there in part, ironically, by Sen. Olympia Snowe, R-Me). The 11-11 tie on network neutrality should be a signal, however, that all must be done to prevent Sen. Steven’s absurd “Advanced Telecommunications and Opportunity Reform Act” from passing the full Senate. Among the give-aways to our new media conglomerates was a permanent ban on Internet taxation. This is a boon for a few online operators at the expense of education, public safety, health care and other community services. The vote to make the moratorium on Internet taxes permanent was 19-3 (helping lead the charge was Sen Allen (R-Va).

Meanwhile, up in Canada, we have another example about what happens when we permit broadband monopolists to control access via unfettered Quality of Service (QoS) pricing schemes. Shaw Communications, the leading Canadian cable company, is using its clout over broadband lines to derail competition in the voice-over-Internet-protocol (VOIP) market. Shaw claims that customers of Vonage and other competitors should pay it a $10 per month “QoS Enhancement” fee in order to ensure their calls get the same favorable treatment the cable company gives its own VOIP customers. According to press reports about the litigation between Shaw and Vonage, the cable company says its VOIP service is “offered over the operator’s QoS-enabled network, managed network, while Vonage’s service travels the public Internet and is open to packet delays and other inherent limitations.”

In other words, welcome to the wacky, undemocratic, and Citizen Kane-esqe world of the two-tiered Internet. Thank you Senator Stevens! Once again, building us in the U.S. the digital bridge to somewhere. Namely, the bank vaults of Verizon, AT&T, Comcast, and Time Warner.

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FCC Chairman Kevin Martin: A Wholly Owned Bush WH Subsidiary, or Kevin Martin is really Michael Powell’s Political Twin

Soon, the Bush FCC will launch an effort to further consolidate control of a few over the nation’s major newspapers and T.V. stations. Martin is determined to accomplish what his predecessor Michael Powell was incapable of doing. Martin will allow major daily newspapers to be folded into T.V. empires (by eliminating the cross-ownership safeguard). He will also permit a single company to own several T.V. stations in the same town. As with Powell, Martin thinks it’s fine and dandy for one company to own multiple TV stations, eight radio stations, the newspaper, the cable system, and the principal broadband Internet service provider in a single large market. Also as with Powell, Martin appears to be also giving a cold shoulder to fellow Commissioners Michael Copps and Jonathan Adelstein who want to see real public debate and a serious independent research review done prior to any decision-making. As with so many other FCC officials, past and present, Democratic and Republican, Martin has a “don’t ask, don’t tell me” policy when it comes to honestly addressing the current crisis in U.S. electronic media (recall TV’s failure to seriously cover the run-up to the war, among many other discouraging examples).

Yesterday, President Bush made clear who is calling the FCC shots. At a signing of the new Bush-Martin (and sadly, Michael Coops) indecency law, the President said, referring to Martin [according to Broadcasting & Cable] that: “He’s a part of the Executive branch. And since I’m the head of the executive branch, I take responsibility, as well, for putting people in place at the FCC who understand one of their jobs, and an important job, is to protect American families.” Of course, the FCC is supposed to be an independent agency. It’s not—as White House’s past and present frequently tell the Chair what to do via back channel. In the case of media ownership and network neutrality, you can be sure that WH has weighed in to help detail Kevin Martin’s pro-Big Media agenda.

Next week, Martin will approve a new huge give-away to the broadcasting industry, worth billions (it’s called multi-casting must carry). This will give every TV station, and powerful group owners, the leverage to extract programming and broadband distribution concessions from phone and cable companies (the TV lobby won’t need network neutrality, since Martin is giving them the ability to ensure their programming streams can run on the fast lane for free).

But Martin will find some rough seas ahead. His reputation as chair is likely to be one of a narrow-minded bureaucrat, rather than a real public servant.

QoS and the Network Neutrality debate: Gaming Policymakers to Win the `Triple Play’

A refrain from the phone and cable industry, in the debate over network neutrality, is they have to manage their networks. Hence, their claim they need the authority to oversee traffic flows—such as ensuring a time-sensitive Voice over the Internet (VOIP) phone call is promptly delivered (while allowing more time, say, for an email to reach you). Such traffic management techniques are often called “Quality of Service” or QoS. Verizon, AT&T, Comcast and others suggest that they would be hamstrung by a net neutrality safeguard, because it would prevent or impede them from using QoS techniques to ensure time sensitive information is given priority.

But network neutrality proponents aren’t saying that network providers shouldn’t be able to fairly and efficiently manage the network. We are all for a digital traffic cop who works for the good of all. But phone and cable companies want a private electronic operative on the beat. They want to use QoS to give their traffic (video, data, etc.) a turbo-charged passage via fast lanes into our PCs, TV’s, and mobile devices. Why? So they can enjoy what they are calling the “triple play.” That’s the latest communications industry buzzword ((goodbye synergy!) reflecting plans to monetize as much as possible our digital lives. Triple Play means that Verizon or Time Warner will lock up customers by selling them voice, video, and data services in either or both wired and wireless formats. As part of their “Triple Play” business model, phone and cable companies want to use QoS to extract (extort) fees from content providers who also want to travel on fast lanes by getting a friendly electronic nod from the private traffic cops.

We urge you to read some of the literature illustrating how control over the network is key to AT&T and others plans to score a triple play. And then we ask—do we really want to let a few companies control the U.S. Internet’s digital destiny? Tell Senator Stevens—who doesn’t seem to really get the problem—that he should stand up for Internet freedom. (We also urge you to contact Senator Inouye and ask him to oppose any legislation that fails to protect U.S. online communications).

The Washington Post’s editorial board on Network Neutrality: Boy, do they need someone who knows the media business working there!

The Washington Post’s editorial position on media and communications policy issues has generally taken a pro-consolidation line over the years. This is ironic and sad, especially given the concerns expressed by the paper’s two top editors about the dramatic decline of quality in U.S. journalism. But in their much acclaimed “News about the News: American Journalism in Peril,” Len Downie Jr. and Robert G. Kaiser fail to acknowledge at all the role which consolidation contributes to the deterioration of journalism. For the impact of media industry lobbying on media ownership has led to newsroom cutbacks and an industry orientation to journalism `light.’ But Downie and Kaiser—as well as their editorial board colleagues—fail to make the connection between regulatory safeguards and a media system that serves a broad range of information needs in a democracy. Nor is the Post ever clear to its readers about what it is really doing when it comes to lobbying Washington to advance its own corporate interests. For example, the paper has never well explained the Post Co.’s political support for the elimination of the broadcast-newspaper cross-ownership safeguard (which is about to be taken up, once more, by the FCC).

In the case of network neutrality, the Post should have been more candid about the political role its parent (Washington Post Co.) is playing. It’s not as simple as [we have] “interests on both sides of this issue.” The Post Co’s cable subsidiary president, Thomas O. Might, has been on the cable lobby board of directors (NCTA) for years. The Post therefore has been intimately involved in the closed-door strategy developed by the NCTA to over-turn the rules requiring an open, non-discriminatory Internet. In addition, the Post’s clout enables it to distribute its content over GE/NBC/Microsoft online properties–something a start-up would find it difficult to readily obtain.
On the merits of the Post’s argument, we can only say that they are either being disingenuous with readers or are incredibly naïve about the media business. In its editorial, they dismiss our concerns that–in the absence of network neutrality– the Internet will come to resemble the cable T.V. industry. They claim that technology will ensure the low-cost production of content. But what they ignore is that like cable, the company that controls the wires (or airwaves, in the case of wireless), can determine how each packet of content fares on the network. The few cable and phone companies, which now control 98% of the U.S. broadband market, can use their power to choose winners and losers (as the cable TV industry has done with video programming). In addition, those content providers that can best promote and process their interactive content will also have a digital leg up. Without net neutrality, the online programming owned or affiliated with the phone and cable broadband duopoly will always be in the lead.

As for speculation—it’s not. The equipment to control the Net’s future is being rolled out, as we speak

Will Microsoft, Yahoo!, Diller, etc. Send in the Ads to Save Net Neutrality?

It’s time for the six big new media corporate supporters of network neutrality to get real—or go back to Silicon Valley, Seattle, or Aspen. What’s needed now—after the disastrous and humiliating vote in the House—is the one thing that politicians really respect and fear—TV ads. Letters from Microsoft and visits from cyber wunderkinds aren’t enough, especially with the PR and lobbying blitz underwritten by the Telco’s. As the Senate Commerce Committee takes up network neutrality this week, it’s time for Gates, Brin, Barry Diller, Terry Semel, and Bezos to get real (we acknowledge with respect the work done by eBay CEO Meg Whitman asking one million of its members to take action).

The copy for the ad is a no-brainer: `The big Phone and Cable Companies (yes—our partners AT&T, Verizon, Comcast) want to have a monopoly over the Internet. They want to jack up the prices you and I pay for service. They want to transform the ‘Net into a pay as surf toll road filled with commercials and the kinds of programs the FCC will soon impose stiffer fines for. Help us stop them. (So, okay, that’s not the ad. But they can afford their own copywriter.)

So, we ask. Will these companies devote the resources—a pittance to their bottom lines—to help save the U.S. digital communications system from these corporate cutthroats? Or, are they really a two-faced bunch of new media conglomerates that don’t have the best interests for the democratic potential of the broadband Internet at heart?

Watch your TV screens to find out.

As the House Votes on Net Neutrality, A Case Study of a Non-Neutral Net/Verizon-Disney’s Broadband Deal Illustrates Power of Telco Powerhouses

When Verizon and Disney signed a “long-term programming agreement” in 2005, it illustrated why the Congress should enact net neutrality safeguards. Disney sought to secure the broadband gate keeping power that Verizon (and only a few others) have over both digital TV and Internet distribution. Under the deal, Verizon agreed to distribute (via its FIOS service) a dozen channels on the preferential expanded basic tier. They included: ABC Family, ABC News Now, Disney Channel, ESPN, ESPN2, ESPN Classic, ESPNEWS, ESPNU, ESPN HD, ESPN2 HD, Ton Disney and SOAP net. Disney also gained favorable distribution for its Spanish language content and its video-on-demand library,

But more importantly, Verizon agreed to bless a Disney owned “broadband product portfolio” including “ABC News Now, Disney Connection, ESPN360, Movies.com and a newly launched broadband soap opera product.” This will likely give Disney content the fast-lane service (including better promotion) that Verizon, AT&T and cable want to impose for the online medium. In addition, in an example of how a Verizon can police the Internet for its favored customers, the agreement included a promise by the phone giant to identify subscribers who are infringing on Disney’s “copyrighted works.” Verizon agreed to “forward and track notices to its subscribers allegedly engaged in the unauthorized distribution of Disney’s copyrighted works, without identifying the subscribers to Disney, and either provide subscriber identifying information pursuant to lawfully served subpoenas or terminate Verizon Internet service provided to subscribers who have infringed Disney copyrights and received multiple notices.”

Without network neutrality, every content provider will have to try and negotiate some deal with a Verizon or Comcast. The Internet should operate without gate keepers and online snoops. Let’s not let them turn the Net into Mickey Mouse. Congress must stand up to the special phone and cable interests

Memo to Heritage’s James Gattuso: The era of trickle down media economics is over

For too long, conservative media and communications advocates have supported a policy regime that has failed the public. Just give (fill in all or your favorites) the broadcasters, the cable companies, the phone companies, the technology companies a “free” rein, and all of our needs for a diverse, competitive, and democratic system will flourish. Technology, if left unfettered, will fulfill its potential (see his blog entry at Technology Liberation Front). Like the trickle-down economists, Mr. Gattuso and colleagues have held sway with many politicians and FCC commissioners. But—media history has proved them wrong. That’s why we are not going to let them do to the Internet what they have done to commercial broadcasting and cable communications.

Just leave us alone, eliminate all public interest policies, and the technology will fulfill its democratic potential. That’s what commercial radio said in the early 1930’s. Broadcast TV echoed it during the 1950’s. Cable used it to win “deregulation” in 1984. Consequently, we have a homegenous system of broadcasting and cable where there is no real diversity, little in-depth journalism, barely any competition. Such a laissez-faire media environment has harmed the country, principally through undermining the potential for serious journalism.

The rhetoric of Mr. Gattuso and many of his anti-network neutrality allies is wrapped around a decades old critique of communications policy. In their world—the public are just consumers. They are not citizens or other active members of the community. They espouse that the interests of the network provider should be paramount. We believe it’s the interests of everyone: teachers, parents, children, journalists, the poor and countless others that must be taken into account when conceptualizing policy for communications. Democratic expression—not corporate profits—must come first. The market will still have plenty of room (and will do even better if it treats people fairly and helps build a stronger U.S.)

I am amazed that many so-called experts ignore what’s really going on in the commercial marketplace—let alone behind the scenes in the policy sphere.
First, there are clear plans to change the way the Internet works. It’s not about generating revenues to build out the network. It’s about greed—money for a few telecom giants. At the expense of a communications system that serves all—for other commercial giants, small businesses, non-profit corporations, and the average Jane and Joe. AT&T, Verizon, and Comcast want to seize what they are already calling their “pipes” to give themselves the monopolistic advantages they have lost as a result of technological change.

We all know that competition law—and the FCC—are not effective tools to protect either competition or [more importantly] public discourse. Conservatives have railed against government for years—esp. the FCC. Now they are saying, don’t worry, if there are problems—our bloated, corrupt and ineffective governmental institutions can take care of you. I don’t believe in buying the digital equivalent to the Brooklyn Bridge—nor should conservative media advocates argue for one.

The cable and phone lobby have used their collective political power to gain dominant control over U.S. broadband distribution. They went to the FCC and wiped out competition via other ISPs (there were thousands in the U.S. during the dial-up era). Phone and cable companies have lobbied side-by-side to prevent municipal or non-profit competition. They deliberately eliminated the policy requiring non-discriminatory treatment of content—a sure sign in my view they intend to discriminate (but come to our website to read white papers and other documents that show how such discrimination online will be done).

Both the cable and phone industry have the same business model—a souped up broadband video on demand kind of service filled with data collection, interactive ads, and other elements from our popular culture. They don’t need the network to differentiate—because they are the same. The vision they have for the future of the Internet is television. We deserve better.

Net neutral rules would enable new entrepreneurs to emerge and help protect free speech. Yes, Mr. Gattuso. It would lead to lobbying and lawsuits. The big cable and telephone companies will do anything to control the future of the U.S. media marketplace. But with net neutral rules, other voices will have a better chance to be heard. Voices—we hope—interested in building a better democracy and an Internet that serves all equitably.

PS: I’m sorry that Mr. Gattuso doesn’t like our pointing out some of Heritage’s funders that raise a potential policy conflict over network neutrality. But disclosure is very important. So when AT&T is a premium sponsor of Heritage—it behooves Mr. Gattuso to say so clearly. He also should have identified where Prof. Yoo—whom he quotes/cities frequently—gets some of his money as he attacks network neutrality (the cable lobby).

Why are Conservative Leaders, such as Grover Norquist, Fearful about Individual Freedom Online?

We are astonished at the reaction of all the so-called conservative/”free market” groups that have rushed to side with the telephone and cable monopoly in the network neutrality fight. This is battle between those who want to ensure our individual freedom to travel online wherever we wish to go, versus those who wish to create a private Internet toll-road. The Internet should not be a gated community. It’s the public square—with plenty of convenient shopping nearby.

So why oh why are the groups backing AT&T, Verizon, and Comcast—such as the Heritage Foundation, Americans for Tax Reform, CATO, the Competitive Enterprise Institute, the National Taxpayers Union—doing this? They claim that network neutrality supporters are either liberals desiring to “regulate” the web or that companies such as Google and eBay are looking for competitive advantages. But—they are simply wrong. And the public will pay dearly for their foolhardy bad judgement.

The phone and cable companies have plans to dramatically change the wide, open spaces of online into their private property. They want a digital monopoly—like they have had either in the phone or cable TV business.
It’s a land grab of the Internet in the U.S.—with restrictions on our freedom to travel online, new threats to our privacy, and lack of consumer choice. These so-called conservative groups have been badly misinformed—or are on the financial dole from the phone and cable lobby. Whatever the reason, it’s evident that they’re not well serving their members by selling out the Internet to a tiny handful of monopolists. (They should all identify whether they have taken money from the communications lobby and how much).

They are also unaware of the phone and cable plans for the Internet. When the Heritage Foundation’s James Gattuso says network neutrality would prevent “network owners…[from using] scare Internet capacity more efficiently” he ignores there plans to impose a pay as you go Internet toll road. That would mean that a phone or cable company could make it harder for us to access the website of our choice because they have given themselves priority. In other words—the public gets to stand or lumped into cramped digital economy class, while the phone or cable company puts itself in first class (paying for that service with the money they get from our bills each month).

Shame, shame on “Americans for Tax Reform” and the other groups. Why are they putting hard-working families last and the Internet `super size us’ media companies first?

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Hey! Guess Who Helps Fund the Heritage Foundation? AT&T and Verizon

Ready as always to weaken the public interest potential of U.S. communications, James L. Gattuso wrote a anti-network neutrality “Backgrounder” for the Heritage Foundation (released June 2, 2006). Subtitled “Will Congress Neuter the Net?”, the piece is a politically timed missive designed to undermine the growing pressure on Congress to enact network neutrality safeguards. It contains the usual litany of rationalizations and under-developed analysis used by big cable and phone advocates to criticize network neutrality.

But notably missing from Mr. Gatttuso’s piece is any admission that two of the Heritage Foundation’s funders just happen to be–yes, AT&T and Verizon. In its 2005 annual report, AT&T is listed as one of the few “premier associates.” Verizon is placed at “executive associates” status. It just so happens, as you know, that AT&T and Verizon are leading the charge against network neutrality (and paying a lot for the work of many opposition groups). Perhaps it was an oversight of Mr. Gattuso. But such financial ties must be identified (he should also have noted that Professor Yoo, whom he frequently cites, undertook a anti-network neutrality study funded by the cable lobby).

We will respond to the so-called Backgrounder in our next post. Mr. Gattuso should look closely at his Heritage’s Foundation funders and acknowledge any potential conflicts of interest.