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.

Two-Bit Torrent—Selling Out the ‘Net to give us “Dukes of Hazzard”

BitTorrent Bram Cohen made a stir recently when he questioned the reasoning behind the push for network neutrality. He told the BBC that he was concerned that net neutrality safeguards could “result in an absurdity like making it so difficult so ISPs can’t drop spam…or stop [hacker] attacks. The BBC said Cohen was “in the pantheon of Internet Gods” like Berners Lee.

But Cohen’s business deals with big media require closer scrutiny. BitTorrent is now working to develop “integrated monetization for paid and ad-supported content,” according to Interactive TV Today. Its new deal with leading anti-network neutrality company Time Warner will enable the cable giant to use BitTorrent technology to sell us such content as “National Lampoon’s Vegas Vacation, Natural Born Killers, and—“Dukes of Hazzard.” No doubt Mr. Cohen views the launch of what is called the “legal BitTorrent online video service” as his ticket to vast personal riches. (As part of its settlement with MPAA, BitTorrent is also working to remove what it considers illegal content from its service, including its search engine).

Mr. Cohen has made his deal—to get on the fast lane. What he should remember is that the Internet is more than a fancy digital distribution system for Hollywood. It has a role to play to ensure a equitable global civil society. That requires a internet where people and content are treated equitably—even if it means less profits for BitTorrent.

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Not-So Smart Mobs: The Wireless Industry War Against Net Neutrality

It’s not just the biggest phone and cable companies opposing a open Internet (net neutrality). It’s also the wireless industry—including companies providing cellular and mobile communications. One of the principal characteristics of our expanding ubiquitous digital media environment will be its reach—on the street, in transport, and everyplace else. New forms of political action and cultural expression could evolve if the U.S. can have a non-discriminatory mobile environment.

But that’s not what the CTIA-The Wireless Association wants. They are opposing network neutrality safeguards. In testimony before the Senate Commerce Committee earlier this month, CTIA’s chief Steve Largent warned of “many of the unintended consequences that would flow from some of the Net Neutrality regulations being considered [that] would have a particularly negative impact on wireless consumers.” What Largent really meant was that the wireless industry hopes to impose the same kind of toll booth regime for mobile communications. In their vision, ads and content supported by a McDonalds, P&G soap, Fox News or Disney will have preferential access. CTIA’s board includes T-Mobile, Cingular (AT&T), Sprint Nextel, Verizon Wireless and most of the key manufacturers. As we mentioned in yesterday’s entry, CTIA is also a member of the anti-open Internet group called netcompetition.org. (It’s time, by the way, we had a real anti-trust investigation of the mobile industry).

The united front of cable, wireless phone and wireless/mobile companies fighting against network neutrality is a good example of why we need serious policy safeguards (going beyond network neutrality) to protect freedom of communications in the U.S. Without such rules, the civic potential of Howard Rheingold’s Smart Mobs will be thwarted by powerful commercial forces.

NetCompetition.org: Distortions and Cable/Telco Flackery

We are disappointed that Scott Cleland would act as “chair” and chief advocate for this anti-open Internet group. Its “members” (really its financial backers) are a rogue’s gallery of some of the most powerful and avaricious big media companies: Verizon, Time Warner, Comcast, Advance Newhouse, and AT&T. This front-group also includes industry lobbying heavyweights NCTA, CTIA, USTA, and ACA. In other words, it’s a cable and Telco joint lobbying venture. The role that the cellular lobby (CTIA) plays here illustrates how both the wireline and wireless industries wish to jointly create a cash and carriage broadband distribution system.

But the “research” and information on netcompetition.org is shoddy and reflects a vision promoting monopoly power and greed. Mr. Cleland and his allies should know better. Net Neutrality is about democracy—removing barriers to the distribution of content essential for a civil society to function. That’s why nearly all the consumer and good government groups support network neutrality. It’s not about the corporate welfare of a Google or Microsoft. It’s about ensuring there are as few gatekeepers as possible for content promoting such applications as political speech, civic engagement, non-profit arts and culture, education, life-long learning and everything else we require in a digital society. I don’t have time here to rebut all their assertions (they all all shamefully misleading). This is a mean-spirited, propagandistic website. Mr. Cleland should have the group change its name to more honestly reflect what they are about: netmonopoly.con

Communications Workers: Selling out the U.S. Internet and the Union Movement

For years, one of the biggest impediments to organized labor’s goals to promote a more democratic America has been the media/telecom policies of the Communications Workers of America (CWA). Now, with CWA’s active lobbying against a federal network neutrality safeguard, CWA once again reveals its misguided, wrong-headed, short-term approach to communications policy. This week, CWA sided with Verizon, AT&T and other phone and cable giants who are fighting tooth and nail to derail Internet freedom legislation. On May 24, CWA President Larry Cohen sent a letter [PDF] opposing the network neutrality bill offered by House Judiciary Committee chair James Sensenbrenner, Jr. CWA became a flack for Verizon and others when it claimed that his bill, which would ensure an open Internet, “would retard” the “deployment of universal, affordable high-speed networks…” (Thanks to great work by advocates, the bill passed the committee 20-13).

Over the last decade, CWA has not served its members and the larger union movement well. Instead of advocating for an open media system, CWA has frequently sided with “big media” interests, especially the largest phone companies. For example, CWA supported the Comcast takeover of AT&T Broadband. CWA representatives will claim that by opposing network neutrality, they are helping the economic interests of their employers (and helping promote job security at Verizon, AT&T, etc.). But it is shortsighted thinking. Only with a truly open digital media system will Labor be able to get its message out and mobilize supporters. A democratic media system—with a non-discriminatory Internet/digital medium at its core—will help fulfill the goal of Labor for a more democratic U.S. CWA has largely set the communications/media policy agenda for the AFL-CIO. It has helped the union movement think “small” and short-term at precisely the point when a bold and forward-thinking approach is required for it to thrive in the new media era. Sadly, CWA also violates the best interests of the journalists it represents through its Newspaper Guild affiliate. In essence, CWA is opposed to the free flow of information online. (In its letter, CWA claims that while it opposes network neutrality, it supports an “open Internet.” But it does so by backing the toothless provisions in the “COPE” bill that would have the FCC set up a Bell/cable friendly “complaint adjudication process.”)

CWA has lots of high-minded communications policy rhetoric on its website. But it might as well replace its union logo with that of AT&T, Comcast and others who are engaged in a digital land grab of the Net. The leaders of CWA should be ashamed of themselves. And its members should demand the union reverse its position and join with others supporting network neutrality.

PS: Read a brief commentary from SEIU’s Andy Stern supporting network neutrality. Here’s a union leader who gets it.

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NSA, the FCC and White House Martin’s, and Sen. Stevens: Beyond Cover-up

It’s not surprising that FCC chair Kevin Martin refused to investigate how the phone companies he oversees have turned over our personal records to the National Security Agency. Martin—who is supposed to be running a so-called “independent agency”—said he was obeying “the representations” of Director of National Intelligence (DNI) John Negroponte and NSA chief Keith Alexander. In a letter to Rep. Ed Markey (who has been doing a terrific job all around on communications issues), Kevin Martin said that the DNI and NSA had warned him that such a study would require the FCC to examine “highly sensitive classified information.” Kevin Martin, of course, is part of the Bush White House conservative cabal that is behind the violation of all our privacy. Martin’s wife Catherine is an assistant to President Bush. Before that, she was an assistant to Vice President Cheney. Her relationships with Texas allies of Pres. Bush go back a number of years as well.

Meanwhile, Senate Commerce Committee chair Ted Stevens, who termed the call for an FCC investigation “misguided,” revealed once again how out of touch he is. Stevens is quoted in Communications Daily (May 24, 2006) saying that he had been briefed on the NSA phone record collection effort. The newsletter reports that Stevens “believed the information the companies gave the NSA was equivalent to creating a database of the names and phone numbers in a phone book.” And Stevens thinks that fine! Can’t wait until he helps wreck U.S. broadband/digital media with his forthcoming bill.

Meanwhile, Kevin Martin should be asked to resign. He isn’t running an independent agency; it’s now just a creature of the defense intelligence establishment

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U.S. Broadband and the Public Interest: A Deafening Silence? Now is the Time to Raise the Stakes

As the Senate considers legislation that could set the framework for U.S. digital communications for years to come, we are disappointed about the narrowness of the debate. Network neutrality, while vitally important, should not be the “end-all” in terms of addressing how the public interest must be served in the emerging digital era. Public interest groups and others should be pressing members of Congress and other allies to address how, for example, broadband communications can generate financial and other resources for Americans trapped in poverty. We should be asking now how phone and cable high-speed systems can be used to improve public education. Where are the calls for policies that would break open the lock that cable, phone, and broadcast companies will still have over digital television services? The time is also ripe to address campaign reform in the era of targeted digital advertising (where big money will still largely determine one’s political reach). Privacy, including protections from both government and commercial surveillance, should also be on the agenda.

Two weeks ago, NY State Attorney-General Eliot Spitzer decried the “lack of vision and investment” when he released a “universal broadband access” plan for New York. Spitzer was referring to his state. But we believe there is overall a “lack of vision” coming from those who care about the future of the country. Everyone who knows digital media recognizes that it will be one of the most powerful forces shaping our society. We will be defined as a culture by what we do with the ubiquitous, interactive, personalized, and virtual system that is about to unfold.

Network neutrality has justly generated a tremendous response—thanks to the good folks at Free Press, Common Cause and many others. But it is the `no-brainer’ of broadband politics. Stopping a Bell/cable takeover of the Internet is clearly required. But so are policies that ensure that today’s network neutrality proponents—such as Microsoft, Yahoo! and Goggle—aren’t just allowed to privately prosper. They and the phone and cable companies ultimately share the same business model—a broadband system where consumerism plays the dominant role in our lives. We must demand more than just an Internet that can deliver interactive ads.

Once legislation passes, our U.S. broadband system will quickly evolve. Market structures will be created. It will be harder to make changes. We understand that with a heavily business captured Administration, Congress, and FCC, a public interest agenda would be impossible to get. But it would set the stage for what should be raging and passionate action in the years to come to create a digital media system that nurtures free speech, civic participation, and social justice. With Senate Commerce Co-chair Daniel Inouye now in support of net neutrality and greater community control, groups may have an ally to begin such a call.

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NSA, Network Neutrality and Domestic Spying: There’s More Data Collecting to come from AT&T, Verizon, and others

All along, the move by the Bush Administration to permit a few giant telecom companies to control the flow of all the data coming into to our PC’s, mobile devices and (very soon) digital TV’s have raised concerns about the government’s ability to more effectively monitor our communications and behavior. The fight for network neutrality has always also been a way to throw some kind of digital monkey wrench into the kind of one-stop eavesdropping our government likes to do. The Bush broadband plan, initiated by former FCC chair Michael Powell and continued by current chair Kevin Martin, permits just a few to control our broadband communications. Among them, of course, are the phone companies nailed yesterday by Leslie Cauley in USA Today: AT&T, BellSouth and Verizon.

The Bush plan has turned over a great deal of the U.S. digital distribution system to these three domestic spying allies. But as cable companies expand their voice service over the Internet, don’t think Comcast and Time Warner won’t also be asked—and line up– as well. These few broadband gatekeepers will know more than our phone calls; they will know where we go in cyberpace and–through location identification technologies–also know we are on the street. It isn’t healthy for a democracy to only have a handful of giants in two industries controlling all broadband traffic. Companies who are always interested in playing ball with Washington. Indeed, it’s the convenience of one-stop domestic spying that may be one reason why the Bush Administration supports the broadband giveaway to the Bells and cable.

Of course, both the phone and cable industry plan to do a lot of spying on us anyway—for commercial purposes (see this page for industry documents from Cisco and others that explain further how much personal info will be collected). Groups such as the ACLU and others had wanted a policy where the U.S. would have thousands of ISP’s—hence making it more difficult for the Feds to line-up everyone’s data. The Bush folks made sure we lost that (they got some help from a number of Dems as well). Now the only choices we may have are companies in bed with the NSA and DOJ. That’s why we need a network neutrality safeguard. It must be at the foundation of digital era civil liberty safeguards protecting our privacy from both commercial and governmental surveillance.