Net Neutrality

So Far Net Neutrality Hasn’t Broken The Internet

Shares of Verizon — the future home of this publication — a company viscerally opposed to net neutrality, are down a fraction in a down market. Investors, it seems, aren’t pricing much downside into net neutrality in the immediate aftermath of its enaction.

There is a certain irony to the Verizon point. Verizon brought the last suit against net neutrality that led to the new rules. Title II is in no small way due to the actions of that ISP.

Legal challenges to net neutrality are on a fast track and should be wrapped up, perhaps, by the end of 2015. The key aspect to an accelerated court schedule is that the market needs certainty on the matter. If the FCC’s rules are overturned, things change. If the agency succeeds in court, things don’t change.

Following the FCC’s victory to put down a stay of its rules, Wheeler said that the decision “give[s] broadband providers the certainty and economic incentive to build fast and competitive broadband networks.” ISPs would rather have it another way.

Aside from legal threats, another potentiality looms for net neutrality: A new administration’s FCC changing the rules. That fact adds another wrinkle to the current presidential election cycle — who wins will be able to either maintain, or shape, net neutrality policy in a different direction.

Congressional action, of course, remains a possibility.

Mike Montgomery of CALinnovates, a technology interest group, told TechCrunch that if the party in the White House changes, things could rapidly shift:

A Republican President will surely make the appointment of a new FCC Chairman a priority, and that new Chairman would likely take a sledgehammer to the Open Internet Order as her or his first order of business. […] The new President’s appointment of a new FCC Chairman will shift the balance of power at the Commission, turning a 3-2 Democratic majority into a Democratic minority, thus providing the votes to either completely overturn the imposition of Title II or drastic forbearance, leading to a theoretical ‘wild west’ that would lack any clear rules of the road, which would create a nightmare scenario for consumers, startups and the greater business community, and investors.

Montgomery said that if the net neutrality rules lose in court, it could lead to “a situation where fast lanes, blocking, and throttling will be squarely back on the table.”

In short, here we are, as expected. Welcome back to net neutrality.

CALinnovates’ Statement on DC Court’s Denial of Title II Stay

The following statement can be attributed to CALinnovates’ Executive Director Mike Montgomery:

“This is the first of what will be many court decisions with regard to Title II and Net Neutrality. Unfortunately, these decisions will take several years and leave a great deal of uncertainty in their wake – uncertainty that will hinder innovation, business planning and ultimately the growth of the Internet and the future of the new economy.

“Today’s legal decision changes nothing about the policy imperative, which is why it is essential for Congress to take action in a bipartisan fashion to settle the issue around Net Neutrality once and for all in a way that moves beyond Title II and takes a 21st-century approach to technology policy.”

The 2016 Net Neutrality Time Bomb

(Special to Medium)

No matter who wins the next presidential election, Net Neutrality isn’t secure without legislation.

Elections aren’t always a good thing (I know that sounds un-American but hear me out…)

Elections are the bedrock of our democracy and one of the many things that make this country great. If an elected leader isn’t cutting it, the voters have the opportunity to kick him or her out of office every few years. That’s powerful stuff.

But when it comes to Net Neutrality, the very nature of elections puts the Internet at risk. Thanks to recent action by the Federal Communications Commission (FCC), Net Neutrality is now the province of the FCC.

On January 20, 2016, the nation’s new President will be inaugurated and he (or she) will appoint a new FCC Chairman to replace current Chairman Tom Wheeler. That person will have an outsized influence on the future of Net Neutrality and he (or she) may decide not to enforce the current rules or to change them all together. Everything is riding on the next President’s feeling about Net Neutrality. Although the campaign season is just getting started, we’re already getting a look at who the likely candidates will be and where they stand on Internet freedom.

Read the full article here: https://medium.com/@calinnovates/the-2016-net-neutrality-time-bomb-6bac50e0b7ab

NERA: Effect of Title II on Investment Incentives “Worse Than We Thought”

When the FCC released it’s Net Neutrality Order last week, it cited a White Paper commissioned by CALinnovates and drafted by NERA.  The authors of NERA’s White Paper issued a response.  What follows is the conclusion, with a link to the full response, below:

We stand behind the basic results of NERA’s White Paper and find that, if anything, the Order has actually made us more worried about the state of competition and innovation than we were before seeing it, assuming it manages to pass its initial, and inevitable, court challenges. Although the Order is quite long, the actual new rules are very short, reflecting the difficulties that nomenclature and case-by-case analysis will bring. Further, the Order tries to describe the new rules as “light-handed,” ignoring the incentives of aggrieved parties to achieve through FCC litigation what they could not achieve in open competition. As a result, innovation is shackled with new costs that could kill, or at least severely hamper, further development of the Internet ecosystem.

Click here to read NERA’s full response

CALinnovates Statement Regarding FCC Release Of Open Internet Order

The following can be attributed to Executive Director Mike Montgomery

“The inevitable happened today – the FCC’s website broke as it tried to release its 400-page ‘Open Internet’ order, two weeks after the agency voted to approve utility-style regulation of the Internet. Who saw that coming?  Errors aside, today marks the beginning of yet another chapter of the ongoing and seemingly never-ending net neutrality debate. Now that the actual document is finally here, the partisan feud about the agency’s lack of transparency on an issue dealing precisely with openness and transparency might finally be put to pasture.  In the coming days, speed-readers will have their moment in the sun as the nation scrambles to comprehend the 400-page Order and its effect on the Internet ecosystem.

We hope this new stage of transparency and openness will be applied long-term, but the FCC vote will likely prove the wrong vehicle as litigation and future FCCs loom.  Today, CALinnovates calls upon our nation’s federally elected officials to prove the naysayers wrong – bipartisan legislation isn’t just a pipe dream. It’s a necessity.”

US can’t have it both ways on Internet

From a March 6, 2015 op-ed in The Hill by Executive Director Mike Montgomery

The United States’ policy schizophrenia regarding the Internet was on full display last week in Washington. On one day, the Commerce Department explained to a Senate committee why it’s important for the U.S. government to take a hands-off approach to the Internet as a reason why it’s ending its ties to ICANN. And on the very next day, the Federal Communications Commission explained why it’s important to take a hands-on approach to the Internet by imposing net neutrality rules.

Meanwhile, other governments must be smirking at us.

Read the full article here 

CALinnovates Statement on Federal Communications Commission Vote on Open Internet

The following quote can be attributed to Mike Montgomery, Executive Director, CALinnovates:

“The loud sound coming from Washington today is resounding cheers from the lawyers, lobbyists and fundraising groups that will gain from today’s FCC ruling for years to come. There will be a rush to the courtroom, which will take years to sort out.

Congress must step in and provide a solution that affirms the principles of net neutrality but does so with modern legislation that reflects 21st Century technology. The next billion we spend should be on innovation, not lawsuits.”

LINK:  http://www.prnewswire.com/news-releases/calinnovates-statement-on-federal-communications-commission-vote-on-open-internet-300042154.html 

The FCC Should Look To The Future, Not The Past, On Internet Regulation

FCC Chairman Tom Wheeler’s explanation of why he will propose regulating the Internet under Title II is full of references to the past. Perhaps that makes sense considering his proposal would regulate the Internet under the 80-year-old Telecommunications Act. But his words speak volumes about his misunderstanding of how best to balance an open Internet with 21st Century regs.

A large part of Chairman Wheeler’s argument rests on his own experience in the 1980s when he was president of a startup called NABU. The young company offered high-speed Internet service (at the time, 1.5 megabits per second) over cable television lines.

But NABU was thoroughly demolished by AOL. Wheeler claims that the sole reason AOL’s slower service won out over NABU was because AOL founder Steve Case was able to offer AOL over the open phone lines while NABU had to ask each cable company for permission to use their lines. Open vs. closed … an open and shut case.

But the real history of NABU is more nuanced than that. According to Scott Wallsten at the Technology  Policy Institute, NABU users not only had to pay a fee for the service, they also had to buy or lease a $299 NABU computer. But NABU couldn’t offer enough content to induce people to pay that kind of money.

Also the technology wasn’t quite there yet. According to Wallsten:

Cable TV systems were not built to handle much upstream traffic—an issue they still face today. Upgrading the cable infrastructure for two-way communication required significant investment.

The timing just wasn’t right for NABU and that had more to do with innovation than with regulation.  AOL out-innovated NABU.

We need our leaders to be looking forward, not back. By the time this gets litigated, President Obama and Chairman Wheeler will be out of office, and we have no idea how future leaders will apply these new rules. Wheeler’s post shows the need for legislation that modernizes our technology laws instead of trying to regulate a constantly evolving technology using outdated ideas.  As such, it’s time for Congress to step up and work together on a bipartisan basis to craft (and pass) legislation that will remove the uncertainty that comes from electoral musical chairs, because we’re looking at very different regulatory framework if, for example, Jeb Bush rather than Hillary Clinton becomes the next President of our great nation.

CALinnovates Responds to FCC Chairman’s Net Neutrality Op-Ed

Today, FCC Chairman Tom Wheeler outlined the regulatory path he intends to take to achieve net neutrality.  The following statement can be attributed to CALinnovates executive director Mike Montgomery:
“CALinnovates remains concerned about the application of utility-style regulation of the Internet – regulation that won’t even explicitly ban paid prioritization. What we need more than anything is to have bipartisan and bicameral legislation that affirmatively protects the Internet from throttling, blocking, and paid prioritization that won’t be subject to the political whims of future Presidents and FCC Chairmen.  
“It’s been almost 20 years since Congress has provided guidance on important technology policy matters such as this, and it’s high time for a bipartisan, Congressional effort to address net neutrality.  Congressional action will affirmatively protect everyone operating in the Internet ecosystem. Unfortunately, when the FCC votes to reclassify, it will simply mark the beginning of another long Washington process that won’t end anytime soon.”

Regulating the Internet like a utility will leave us with leaky pipes

Believe it or not, the most frustrating aspect of living in California these days isn’t the traffic, it’s the water. We’re in the third year of a drought. And despite the #HellaStorm pounding the state with much-needed rain, politicians are constantly (and correctly) admonishing us to cut back on water use whenever we can, because these rains aren’t likely to continue.

And yet several times over the past few months, there have been giant water main breaks that dump millions of gallons of water onto the street, water that is completely wasted. Last summer, a pipe burst near UCLA dumping 75,000 gallons per minute onto the street until workers from the Los Angeles Department of Water and Power (LADWP) could shut it down. More recently, a water main break in Malibu shut down parts of the busy Pacific Coast Highway because the water pounding the street created a sink hole after spewing thousands of gallons down the drain.

It’s no secret that we’re dealing with antiquated pipes and a bureaucratic system that has been slow to make much-need upgrades and repairs.

Now imagine if the Internet was managed the same way. If instead of innovators constantly looking for better and faster ways to move data, we had the government overseeing the connections that form the backbone of the Internet.

We’re risking that reality. Last month President Obama put forward his vision for net neutrality — and it involved regulating the Internet as a public utility under Title II of the Telecommunications Act of 1934. Under this scenario, the Internet would be treated like electricity, gas – and yes, water. With these rules come burdensome regulations and bureaucratic oversight – the kind of red tape that can stop innovators cold and dry up the private sector investment dollars that are fueling our Internet-based world today.

I’m a firm believer in net neutrality. Innovators will struggle to excel if they have to deal with so-called “fast lanes” where Internet service providers charge certain users more to prioritize their data. It’s important that the playing field remains level. But that isn’t happening, and the Internet is working as it was designed to with consumers reaping the rewards.

With hypothetical harms as justification, treating the Internet like a utility is not the right path to net neutrality. Let’s take a look at the way the government manages the pipes that carry water. Martin Adams, the senior assistant general manager of LADWP water system recently defended LA’s average of three pipe leaks per day. In an interview with the KPCC radio show Take Two Adams said:

“The three a day turns out to be not that much. But in a city the size of LA where we have enough pipe that stretches from here to New York and back–about 7,000 miles of pipe in the street–having that amount of leaks per day is really a pretty good record.”

According to Adams, as much as 25% of all LA pipes are getting to the point where they need to be replaced. Many are almost 100 years old. The water department has ramped up to replacing 25 to 30 miles of pipe per year.

Now imagine that kind of performance and maintenance record applied to the Internet: aging infrastructure and wiring that breaks down regularly; a year-by-year replacement program that slowly addresses only the most severe failures.

If the government can’t efficiently and proactively protect and upgrade the pipes that carry our most-important resource, can we trust it with the Internet?

Private industry invests nearly $50 billion per year on tech infrastructure. Are we willing to risk that investment drying up if red tape discourages this private investment?

We need a better option than regulating the Internet under Title II. President Obama’s plan is not law. Rather it was a suggestion to FCC Chairman Tom Wheeler and his fellow commissioners who are now tasked with figuring out how to maintain net neutrality without impeding innovation and growth. That’s not easy, and given the toxic nature of the debate, it’s not an enviable task either.

The right solution is one that preserves net neutrality (no blocking, no discrimination, no paid prioritization, and full transparency) but also encourages massive build out of what venture capitalist Marc Andreessen calls “more/better/faster Internet to more people in new/different ways.” Busted water pipes today could be the equivalent of busted Internet pipes tomorrow.

Ask anyone in California and they’ll tell you: utilities do not inspire innovation.

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