Verizon’s Bankrupt Broadband Vision

One shouldn’t be fooled by all the PR and rhetoric (let alone the ads) coming from both Bells and cable about what is supposed to be our innovative and creative media future. What Verizon, AT&T, Comcast and others want to give us is a souped-up interactive digital system delivering lots of TV-like entertainment—accompanied by a torrent of personalized advertising. That’s why the cable and phone monopoly are opposed to network neutrality. A truly open system would permit our eyeballs and clicks to really roam free. That’s something that terrifies them, since we would likely be engaged with content they either don’t own or are able to impose a mafia-esque system of payments on (Telco/cable bosses to Gates, Page, Brin, Diller [fill in your name here or favorite site]. If you don’t pay us our digital “vig,” your content is going to end up buried in silicon floating in the East River).

So we think it’s instructive, as part of this blog’s early digital warning function, to give folks a preview of the content soon coming to our broadband screens. What does Verizon plan to offer us, in exchange for killing off community oversight of cable and the scuttling of network neutrality? “Widgets.” Yes, Verizon is running fiber to the home so, according to The Deal, it can offer a “widget” service that “will display local weather and traffic info on TV screens without interrupting a program” [“The Phone Man: Verizon’s CTO, Mark Wegleitner, on how the Bells plan to compete with the cables.” Chris Nolter. June 19-25. 2006]. Wegleitner told The Deal that Verizon is also planning products for “heavy-duty gamers. Maybe they are watching the equivalent of QVC for gamers and say, Boy, I’d like to get more information on that. So they click a button and zip to an infomercial on that game.”

That’s not all. Verizon wants to sync up its mobile video service with what we view over broadband. Verizon SVP, video solutions, Marilyn O’Connell told Screenplays magazine (which covers the broadband market) that the company is thinking about all the triple play revenues it can make from selling music, gaming and information across all platforms. So we are going to see what she calls “threads between what VCAST [Verizon’s mobile content service] is developing in portable snacking on entertainment, and what we’re creating over on the TV side, as well as on the broadband side” [“A View of Things to Come on Verizon’s Roadmap,” June 2006].

This is what we’re going to get if we allow Sen. Ted (“Internets”) Stevens and the bunch of “under the Bell $ influence” R’s and D’s in the House (led by Joe Barton) to get their way with the Telecom bill.

Disney and Verizon: Broadband Lies about Diversity

People of color have not fared well in the U.S. in terms of owning/controlling programming content. Channels serving “minority” audiences have often been created to serve the political purposes of the media lobby. BET was financially backed to help the cable industry secure lucrative franchises from big cities. More recently, Comcast supported the new TV One cable channel to give it greater leverage with officials from the African American community. As we have pointed out previously, the TV industry views the African American and Hispanic “market” as great places to sell soap and other products—not as communities deserving a meaningful range of serious and independent content services. In the emerging interactive broadband era, the stakes are especially high, in our opinion, to ensure that there are well-supported local and national services serving a variety of needs—including news, public affairs, and culture.

Last Monday, executives from both Verizon and Disney claimed that their corporate policies opposing an open Internet and ending community oversight of cable TV would “help improve black and Hispanic presence in the industry” (according to the off-line trade journal Communications Daily, 7/11/06: “Verizon, Disney Executives Say Their Policy Positions Good for Minority Communications”). The executives spoke at a conference held by the Minority Media & Telecom Council.

Verizon’s EVP/Super-Lobbyist (and former Congressperson) Tom Tauke, in discussing why his company opposes network neutrality, said that such a safeguard wasn’t needed because “all players can reach their audiences over broadband.” Disney’s Preston Padden [once the media industry leader fighting for network neutrality] echoed Tauke’s perspectives that people of color have nothing to worry about. He said, noted the trade report, that “near as I can tell, the Internet is completely color-blind.”

But both Verizon and Disney aren’t being honest. They know well that absent network neutrality, a private system for broadband distribution is evolving in the U.S. Powerful gatekeepers are emerging for broadband—just as we’ve had with broadcast and cable TV. Deals are being struck which give a privileged few—such as what was done between Verizon and Disney last year—real access to audiences. Everyone else will be a second-class digital citizen, at best.

I fear that absent action, both in the political front and in the marketplace, the kind of rich digital environment that would meet the full needs of communities now marginalized in our media system will not readily emerge. That’s why it’s time for a serious response to the lies coming from Disney, Verizon and others. We are at a critical crossroads—a turning point—with digital communications. Now is the time to stake a claim for broadband to the PC, TV, and mobile networks. Otherwise, people from America’s diverse communities could end up responding to images and content controlled by others—folks principally interested in selling and making steady bucks.

CDT’s Misguided—and Bell and Cable Monopoly Friendly—Approach to Net Neutrality

The Center for Democracy and Technology (CDT) has long been part of the political support system for the communications industry. Although it considers itself a public interest group, CDT has ultimately served the interests of its many corporate funders (AT&T, Doubleclick, Verizon. Acxion, Time Warner, etc.) Indeed, the group backed away from the network neutrality issue several years ago (then known as “open access”) because, in the words of one CDT executive, “our funders would kill us” if the group called for a truly open (let alone privacy protected) digital media system. CDT’s policy briefs and lobbying often enable its corporate supporters to achieve their political goals (including preventing unwanted legislation, such as safeguards. We think that in the case of CDT’s recent proposal on net neutrality, that’s what they are doing here. For it would fail to protect our (U.S.) digital media environment from being controlled by a tiny handful of broadband giants—AT&T, Comcast, Time Warner and Verizon.

In this case, CDT [read their June 20 policy paper] would permit these monopolists to control the vast expanse of digital distribution that will likely deliver the majority of content to us. In its report, CDT says that “some basic rules requiring network operators to preserve nondiscrimination and openness” would only apply to “those portions of broadband networks dedicated to the Internet.” In other words, the vast majority of capacity used to deliver video and other multi-media content could likely be off-limits to any net neutral safeguards. The phone and cable companies claim they are building private networks—where broadband applications may not traverse over what is considered the “public Internet.” Hence the need, in our view, for far-reaching safeguards to ensure true Internet freedom. CDT also is opposed to any federal rule ensuring common carriage and price protections for consumers.

CDT would like to consider that its proposal is well founded, while others (such as the proponents of true network neutrality) engage in “public rhetoric.” This is also part of CDT’s modus operandi, with a “let’s make a deal we can broker on the Hill” mentality. One shouldn’t be fooled by CDT. What’s needed are strong rules across all digital platforms to ensure a democratic media system. Not—as CDT would have it—give us a small portion of capacity, while electronic privateers control most of the network.

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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