Verizon Files Suit Challenging Net Neutrality

read more hereVerizon Communications Inc. is suing the Federal Communications Commission over the Commission's network neutrality order.

"We believe this assertion of authority goes well beyond any authority provided by Congress, and creates uncertainty for the communications industry, innovators, investors and consumers," Verizon senior vice president and deputy general counsel Michael E. Glover said in a written statement

Verizon filed the appeal Thursday in the U.S. Court of Appeals for the District of Columbia Circuit, arguing that the FCC's order oversteps the Commission's authority.

The court challenge probably is not the last to be filed. The Verizon challenge is essentially jurisdictional. But other parties might want to challenge the policy on other grounds.

FCC Net Neutrality Rule Creates Tiered Internet Access, Despite Not Wanting To

The Federal Communications Commission's "Open Network" rules, which inevitably will be known as the "network neutrality" rules, ironically enshrine the notion of tiered Internet access service, even when it attempts to keep the fixed-network Internet access service a "best effort only" type of product.

There are two reasons. First, the rules applying to wireless networks are more flexible. The second reason is that the rules explicitly exempt enterprise access services from the rules.

"Mass-market retail service" is covered, meaning "a service marketed and sold on a standardized basis to
residential customers, small businesses, and other end-user customers such as schools and
libraries."

"The term does not include enterprise service offerings, which are typically offered to larger organizations through customized or individually negotiated arrangements," the official document says.

That suggests we might conceivably see wireless and business access become the places where more experimentation occurs, since those are the places that differentiated access products can be created and sold.

read the whole document here

A Bit More Clarity on FCC's Net Neutrality Order

Following are key excerpts from the Report and Order adopted by the Commission to preserve the open Internet, released by the Federal Communications Commission. Though the language will be fleshed out when the formal order is issued, the language hints at the amount of work yet to be done to flesh out what it all means.

Rule 1: Transparency

A person engaged in the provision of broadband Internet access service shall publicly disclose accurate information regarding the network management practices, performance, and commercial terms of its broadband Internet access services sufficient for consumers to make informed choices regarding use of such services and for content, application, service, and device providers to develop, market, and maintain Internet offerings.

Rule 2: No Blocking

A person engaged in the provision of fixed broadband Internet access service, insofar as such person is so engaged, shall not block lawful content, applications, services, or non-harmful devices, subject to reasonable network management.

A person engaged in the provision of mobile broadband Internet access service, insofar as such person is so engaged, shall not block consumers from accessing lawful websites, subject to reasonable network management; nor shall such person block applications that compete with the provider’s voice or video telephony services, subject to reasonable network

Rule 3: No Unreasonable Discrimination

A person engaged in the provision of fixed broadband Internet access service, insofar as such person is so engaged, shall not unreasonably discriminate in transmitting lawful network traffic over a consumer’s broadband Internet access service.  Reasonable network management shall not constitute unreasonable discrimination.

Select Definitions

Broadband Internet access service:  A mass-market retail service by wire or radio that provides the capability to transmit data to and receive data from all or substantially all Internet endpoints, including any capabilities that are incidental to and enable the operation of the communications service, but excluding dial-up Internet access service.  This term also encompasses any service that the Commission finds to be providing a functional equivalent of the service described in the previous sentence, or that is used to evade the protections set forth in this Part.

Reasonable network management.  A network management practice is reasonable if it is appropriate and tailored to achieving a legitimate network management purpose, taking into account the particular network architecture and technology of the broadband Internet access service. Legitimate network management purposes include: ensuring network security and integrity, including by addressing traffic that is harmful to the network; addressing traffic that is unwanted by users (including by premise operators), such as by providing services or capabilities consistent with a user’s choices regarding parental controls or security capabilities; and by reducing or mitigating the effects of congestion on the network. 

Pay for Priority Unlikely to Satisfy “No Unreasonable Discrimination” Rule

A commercial arrangement between a broadband provider and a third party to directly or indirectly favor some traffic over other traffic in the connection to a subscriber of the broadband provider (i.e., “pay for priority”) would raise significant cause for concern.  First, pay for priority would represent a significant departure from historical and current practice.  Since the beginning of the Internet, Internet access providers have typically not charged particular content or application providers fees to reach the providers’ consumer retail service subscribers or struck pay-for-priority deals, and the record does not contain evidence that U.S. broadband providers currently engage in such arrangements.  Second this departure from longstanding norms could cause great harm to innovation and investment in and on the Internet.  As discussed above, pay-for-priority arrangements could raise barriers to entry on the Internet by requiring fees from edge providers, as well as transaction costs arising from the need to reach agreements with one or more broadband providers to access a critical mass of potential users.  Fees imposed on edge providers may be excessive because few edge providers have the ability to bargain for lesser fees, and because no broadband provider internalizes the full costs of reduced innovation and the exit of edge providers from the market.  Third, pay-for-priority arrangements may particularly harm non-commercial end users, including individual bloggers, libraries, schools, advocacy organizations, and other speakers, especially those who communicate through video or other content sensitive to network congestion.  Even open Internet skeptics acknowledge that pay for priority may disadvantage non-commercial uses of the network, which are typically less able to pay for priority, and for which the Internet is a uniquely important platform.  Fourth, broadband providers that sought to offer pay-for-priority services would have an incentive to limit the quality of service provided to non-prioritized traffic.  In light of each of these concerns, as a general matter, it is unlikely that pay for priority would satisfy the “no unreasonable discrimination” standard.  The practice of a broadband Internet access service provider prioritizing its own content, applications, or services, or those of its affiliates, would raise the same significant concerns and would be subject to the same standards and considerations in evaluating reasonableness as third-party pay-for-priority arrangements.

Measured Steps for Mobile Broadband

Mobile broadband presents special considerations that suggest differences in how and when open Internet protections should apply.  Mobile broadband is an earlier-stage platform than fixed broadband, and it is rapidly evolving.  For most of the history of the Internet, access has been predominantly through fixed platforms -- first dial-up, then cable modem and DSL services.  As of a few years ago, most consumers used their mobile phones primarily to make phone calls and send text messages, and most mobile providers offered Internet access only via “walled gardens” or stripped down websites.   Today, however, mobile broadband is an important Internet access platform that is helping drive broadband adoption, and data usage is growing rapidly.   The mobile ecosystem is experiencing very rapid innovation and change, including an expanding array of smartphones, aircard modems, and other devices that allow mobile broadband providers to enable Internet access; the emergence and rapid growth of dedicated-purpose mobile devices like e-readers; the development of mobile application (“app”) stores and hundreds of thousands of mobile apps; and the evolution of new business models for mobile broadband providers, including usage-based pricing.

Moreover, most consumers have more choices for mobile broadband than for fixed broadband.   Mobile broadband speeds, capacity, and penetration are typically much lower than for fixed broadband,  though some providers have begun offering 4G service that will enable offerings with higher speeds and capacity and lower latency than previous generations of mobile service.   In addition, existing mobile networks present operational constraints that fixed broadband networks do not typically encounter.   This puts greater pressure on the concept of “reasonable network management” for mobile providers, and creates additional challenges in applying a broader set of rules to mobile at this time.   Further, we recognize that there have been meaningful recent moves toward openness, including the introduction of open operating systems like Android.  In addition, we anticipate soon seeing the effects on the market of the openness conditions we imposed on mobile providers that operate on upper 700 MHz C-Block spectrum, which includes Verizon Wireless, one of the largest mobile wireless carriers in the U.S.  

In light of these considerations, we conclude it is appropriate to take measured steps at this time to protect the openness of the Internet when accessed through mobile broadband

Specialized Services

In the Open Internet NPRM, the Commission recognized that broadband providers offer services that share capacity with broadband Internet access service over providers’ last-mile facilities, and may develop and offer other such services in the future.  These “specialized services,” such as some broadband providers’ existing facilities-based VoIP and Internet Protocol-video offerings, differ from broadband Internet access service and may drive additional private investment in broadband networks and provide consumers valued services, supplementing the benefits of the open Internet.  At the same time, specialized services may raise concerns regarding bypassing open Internet protections, supplanting the open Internet, and enabling anticompetitive conduct.  We note also that our rules define broadband Internet access service to encompass “any service that the Commission finds to be providing a functional equivalent of [broadband Internet access service], or that is used to evade the protections set forth in these rules.”

We will closely monitor the robustness and affordability of broadband Internet access services, with a particular focus on any signs that specialized services are in any way retarding the growth of or constricting capacity available for broadband Internet access service.  We fully expect that broadband providers will increase capacity offered for broadband Internet access service if they expand network capacity to accommodate specialized services.  We would be concerned if capacity for broadband Internet access service did not keep pace.  We also expect broadband providers to disclose information about specialized services’ impact, if any, on last-mile capacity available for, and the performance of, broadband Internet access service.  We may consider additional disclosure requirements in this area in our related proceeding regarding consumer transparency and disclosure.  We would also be concerned by any marketing, advertising, or other messaging by broadband providers suggesting that one or more specialized services, taken alone or together, and not provided in accordance with our open Internet rules, is “Internet” service or a substitute for broadband Internet access service.  Finally, we will monitor the potential for anticompetitive or otherwise harmful effects from specialized services, including from any arrangements a broadband provider may seek to enter into with third parties to offer such services.   The Open Internet Advisory Committee will aid us in monitoring these issues.

FCC Net Neutrality "Rules" are More Like "Principles"

To me, this reads more like a statement of principles and direction than "rules." That likely is by design. That also means if the court challenges do not invalidate the entire order, we are in for a long period of gradual testing of what each of the principles actually means.

It appears we don't really know much, yet, especially since the actual language hasn't been released.

http://www.scribd.com/doc/45749183/Net-neutrality-statement-by-Julius-Genachowski-the-FCC-chair-on-Dec-21-2010

FCC Passes Net Neutrality Order, Unclear What it Means

The Federal Communications Communication has voted to approve new net neutrality regulations on a three-to-two vote. As nearly as we can tell, the new rules, which will face court challenge and possible contrary instructions from the U.S. Congress, mandates network management transparency, and simply codifies existing rules protecting a consumer's right to use lawful applications.

The actual language of the order is not available yet, and much remains to be understood. Some would characterize the general thrust of the rules as forbidding some forms of "priority access" to sites and applications.

The rules appear to apply to both fixed and mobile networks, though only "unreasonable discrimination" is prohibited.

The rules appear to be less affected than fixed networks are, though the language used is broad enough that the actual details will have to be filled in by actual enforcement actions later, taken on a case-by-case basis. It appears we will have to wait not only for the actual written order, but for the legal challenges, case-by-case complaints to the FCC and then possible Congressional direction, one way or the other.

In short, it isn't entirely clear what has changed, here, and how big the impact might be.

Read more: http://www.electronista.com/articles/10/12/21/fcc.approves.net.neturality.rules.despite.gop/#ixzz18ltQVSRl

As expected, many who had argued for more-rigorous rules are disappointed. See http://www.freepress.net/press-release/2010/12/21/free-press-fcc-net-neutrality-order-%E2%80%98squandered-opportunity%E2%80%99 for example.

Does Telco Revenue Future Require Bandwidth QoS?

A new survey of U.S. communications and media executives by STL Partners offers a couple interesting insights. First, "telcos" are largely assumed to own mobile spectrum and networks.

That does not mean every entity can create a business case around mobility in a direct sense. Keep in mind that it is not simply telco executives who think this way, but significantly that media and content executives make the assumption.

Smaller providers might not be able to justify anything other than working with other mobile providers in one way or another. But tier-one providers virtually must be mobile providers, the survey suggests.

Second, future strategies to increase broadband access revenues virtually require the absence of regulatory rules that ban packet priorities and quality of service mechanisms. About 27 percent of respondents believe that telcos must find new revenue sources as a way of improving the economics of the broadband access business. More than 25 percent say more-efficient networks also are required.

Nearly a quarter of the 120 respondents also believe that one of the buest ways to create new revenue streams is to "charge upstream players for value-added services." Aside from building content delivery networks, it is difficult to envision how mobile service providers and fixed-access networks could add value directly to the access product without having the ability to prioritize traffic.

There are, of course, other potential ways to leverage customer relationships, customer data or billing capabilities in ways that partners might find useful. Still, a strict network neutrality regime would severely crimp the ability to add value in the basic access product.

$Multi-Billion Telco 2.0 Growth Opportunities in North America: Can Telcos Act in Time? - STL Partners

63% of Mobile Consumers Want "Quality of Experience" Measures

Fully 74 percent of U.S. mobile users say they have experienced quality issues when using smartphones and laptops on the mobile broadband networks, YouGov and Acision report. Slow speeds, poor network coverage, inability to get connected and lost connections are among the top reported problems.

The most-encountered problems were slow speeds (60 percent), poor network coverage (35 percent), inability to get connected (29 percent) and connection loss (29 percent).

About 63 percent of respondents say they support an active approach to maintaining quality of experience. That includes support for
optimization of data traffic and the differentiation of mobile broadband services. In other words, the very "packet discrimination" that network neutrality supporters say they want.

About 65 percent of those surveyed were unaware that in many networks just a small number of users generate over 80 percent of broadband traffic, causing slow download speeds and connection problems. When those surveyed were made aware of the issues surrounding the fair distribution of bandwidth, 63 percent responded positively to an active approach to fairness aimed at distributing bandwidth between as many people as possible to ease congestion to benefit all users.

Service providers call that traffic shaping. Net neutrality supporters call that "discrimination." It appears users agree with service providers, at least in this survey.

Between 30 percent and 63 percent of respondents even agreed they would be open to pay a small fee for carrier measures that meant a better broadband experience. Net neutrality supporters say they want to outlaw Internet access "fast lanes." It appears users want them.

The research also confirmed the popularity of video services, with almost half of consumers questioned (49 percent) accessing  video sites using their mobile connection. As you might expect, 78 percent encountered QoE issues such as frequent pauses, and as many as 68 percent experienced these problems on a regular basis.

Fully 69 percent would accept an optimization policy that improves performance of a video service. For example, consumers were supportive of measures carriers could take to improve the quality of mobile video by decreasing video size to enable uninterrupted playback.

Consumers surveyed stated they would be willing to pay a small fee to receive services such as notifications when they have reached a certain spend limit on their mobile broadband service (48 percent), fair distribution of bandwidth between consumers (45 percent), personalization capabilities (46 percent), a bundle sharing plan (46 percent) and the ability to set spending limits on their mobile broadband account (42 percent).

read more here

At least according to this survey, mobile subscribers support traffic shaping and other optimization measures, including the opportunity to buy higher grades of service. As we have seen in recent days, consumers often do not want the policies and programs some elites think "are good for people."

Tim Wu on Net Neutrality

I don't agree with Professor Wu on network neutrality, but he remains one of its most-articulate and rational spokesmen.

Waxman Net Neutrality Bill Goes Nowhere

Rep. Henry Waxman (D-Calif.) now says his net neutrality bill is effectively dead after Rep. Joe Barton (R-Tex.) declined to support the legislation, the Washington Post reports.

The draft also would have prohibited the FCC from imposing regulations on broadband Internet access service or any component of the service under Title II of the Communications Act, except when a broadband Internet access provider prefers to do so.



The rules would have applied to all consumer broadband connections, wired and wireless.

The short draft basically codified the existing "Internet freedoms" rules the FCC has bee using, without apparently adding language that prohibits application of quality-of-service features to consumer broadband access.

The rules would prohibit service providers from blocking lawful content, applications, or services, or prohibit the use of non-harmful devices, subject to reasonable network management. Service providers do not object to those rules.

The draft language also would have allowed reasonable network management practices, specifically saying that such practices  "shall not be construed to be unjustly or unreasonably discriminatory."

The draft language did not elaborate on whether enhanced services or other quality of service features are permissible. The language focused on "minimum" standards of behavior, but did  not specifically address whether consumers have the right to buy services that offer expedited or quality-assured delivery.

House Preparing New Net Neutrality Legislation, It Appears

With the caveat that introducing a bill in the U.S. Congress is not a guarantee it will be considered, House Energy and Commerce Chairman Henry Waxman (D-Calif.) apparently is preparing to introduce new legislation creating a framework for network neutrality that, in its present form, seems to be far less onerous than rules the Federal Communications Commission has been attempting to put into place.

The draft also would prohibit the FCC from imposing regulations on broadband Internet access service or any component of the service under Title II of the Communications Act, except when a broadband Internet access provider prefers to do so.

The rules would apply to all consumer broadband connections, wired and wireless.

The short draft, which of course always could be amended into something quite different, should it advance, basically codifies the existing "Internet freedoms" rules the FCC has bee using, without apparently adding language that prohibits application of quality-of-service features to consumer broadband access.

The rules would prohibit service providers from blocking lawful content, applications, or services, or prohibit the use of non-harmful devices, subject to reasonable network management. Service providers do not object to those rules.

The draft also would prohibit "unjustly or unreasonably" discriminating against lawful traffic over a consumer’s wireline broadband Internet access service. Depending on later elaboration and interpretation, this likely would not be objectionable to service providers, either.

The draft language also would allow reasonable network management practices, specifically saying that such practices  "shall not be construed to be unjustly or unreasonably discriminatory."

The language also specifically makes clear that it addresses consumer broadband connections, not all broadband connections, an important distinction as one would not want any new rules to apply to business services.

The draft language so far does not elaborate on whether enhanced services or other quality of service features are permissible. The language so far focuses on "minimum" standards of behavior, but does not specifically address whether consumers have the right to buy services that offer expedited or quality-assured delivery.

read the bill here

One Point of View on Net Neutrality

It isn't a view I agree with, but Tim Wu is an articulate proponent of the argument in favor of net neutrality.

Blair Levin on Network Neutrality

Blair Levin talks about network neutrality.

Verizon on Network Neutrality Issues

Verizon executive Tom Tauke talks about the firm's views on network neutrality

A Net Neutrality "Grand Compromise" is Necessary, Not an Option

At the end of the day, unless the major stakeholders in the network neutrality debate can come to some enduring compromise, broadband investment in the United States is likely to be quite constrained.

That is why agreements such as Google and Verizon have struck, are so important. At the end of the day, unless private commercial interests can be persuaded there is a way forward that encompasses all the key interests, there can be no outcome satisfactory for the public interest, either.

This one graphic suggests why ISPs, as well as application providers, will have to reach a grand compromise. Voice, for over 100 years, has been the underpinning for all public networks, but that is not going to be the case in the future. For the moment, voice continues to underpin mobile and fixed networks.

But nobody believes that will last. ISPs and service providers must find ways to at least replace the lost voice revenues with new revenue sources. Application providers, specifically, and the public interest, in general, also require robust investment in the new broadband and IP networks of the future. But investments always require some expectation of profit. Absent that, investment will not happen.

ISPs are going to have to give up some possible revenue streams. That is what the Google-Verizon agreement stipulates, in essence.

But application providers are going to have to give some ground on network management. Without such agreement, broadband investment will be imperiled. Some do not believe that to be the case, to be sure.

But the investment community has spoken loud and clear, for decades, about broadband and capacity upgrades by cable and telcos that investors worried would not provide a financial return. If one believed that the federal government, or other units of government, could make those investments after private interest collapsed, then collapse would not permanently affect broadband deployment.

But there is not such option any longer. U.S. networks will be built by private investment, or not at all. Despite some carping, that is why the Google-Verizon agreement is so important, and why wider industry agreement on some grand compromise, is essential, not optional. Nobody is going to get everything they might want. But all of us need to get enough to keep moving forward.

The worst outcome for the public interest is continued stalemate.

Private Net Neutality Discussions Restarted

Some key Internet and telecommunications firms apparently have restarted private talks to develop a proposal for how Internet traffic should be managed, the Wall Street Journal reports.

The new discussions are hosted at the offices of the Information Technology Industry Council, a Washington-based lobbying group that represents dozens of tech companies.

Cisco Systems Inc. and Microsoft Corp. are said to be among the firms trying to reach some agreement satisfactory to the stakeholders and the Federal Communications Commission. Apparently Google and the FCC are not at present involved in the talks.

Wireless is Different | AT&T Public Policy Blog

"Unrestricted access rules for wireless networks would hurt users more than help them. They just don’t realize it," writes Fortune.

"Net neutrality would be a serious problem for wireless networks, who all-but-have to prioritize certain types of data-hungry types like say, point-to-point streaming media, over others due to simultaneous usage and current bandwidth limitations," Fortune notes.

"We’ve been making this point for several months now but we can’t emphasize it enough: wireless is simply different," AT&T says on its policy blog.

Wireless is Different | AT&T Public Policy Blog

Fortune article

"Nothing Bad Happens If Net Neutrality Fails"

There's a missing element in discussions about network neutrality, says Dan Frommer, Deputy Editor of Business Insider. "No one has convincingly and realistically explained what would happen that's so bad if ISPs were not forced to observe net neutrality, and if they were allowed to sell faster access to the highest bidders," Frommer says.

"The reality is that nothing really bad would happen," he maintains. Some think the internet access providers cannot be trusted. To be fair, everybody agrees with that, up to a point. The reason Adam Smith said we can rely on markets is that greedy, avaricious behavior by any actor is met in the market by offers from competitors who will offer a better deal. "Greed" is met by competition, and competition restrains greed.

Any ISP that behaves badly will quickly be met by a rival response from competitors eager to take that ISP's business and customers.

"If anything, things could get even more expensive for consumers if net neutrality is enforced," Frommer maintains. Why?

ISPs operate in competitive markets. They aren't perfectly competitive, only workably so, given the high barriers to entry.  If ISPs lose revenue opportunities because of net neutrality, they certainly will look elsewhere for new revenues, and raising effective prices is an obvious path to take.

There is an argument that if quality-assured tiers of service are allowed (something the Google-Verizon deal precludes), better-capitalized firms will be able to pay, and start-ups will not. That's mostly true.

But bandwidth costs are not the major cost item for new software upstarts. To the extent that "more bandwidth" fixes some latency issues, even real-time services can continue to use the best-effort Internet as bandwidths continue to climb.

The vast majority of Internet businesses won't pay for priority bandwidth, if it's ever available. And the ones who do will figure it into their costs of doing business, the same way they do with rent, staff and health insurance, for example.

Some will not agree. Market power is an issue in business. But competition is the natural restraint. Innovation will occur in the presence of, or despite, network neutrality rules. And the Google-Verizon agreement ensures that all application providers have exactly the same prospects in the Internet access part of the ecosystem.

If other ISPs adopt the same framework, fixed network access will remain a "best effort" service offering no advantages to any single application provider.

link

Video Mashup About Google Verizon Net Neutrality Talks

Multisource political news, world news, and entertainment news analysis by Newsy.com

Google Denies Reports It Has a Deal for Packet Prioritization

Despite reports to the contrary, Google says it doesn't have a deal with Verizon on "network neutrality" that includes packet prioritization, much less paid-for prioritization, Multichannel News reports.


"We have not had any conversations with Verizon about paying for carriage of Google or YouTube traffic," said Google spokesperson Mistique Cano. "The New York Times piece is quite simply wrong."

"The NYT article regarding conversations between Google and Verizon is mistaken," said Verizon spokesman David Fish. "To suggest this is a business arrangement between our companies is entirely incorrect."

The original reporting from the New York Times, Wall Street Journal and Bloomberg had suggested agreement on a framework that would have included both "best effort" and "prioritized" services.

All we can say at this point is that the extensive talks between Google and Verizon Wireless will bear fruit. Each company has too much to gain, and much to lose, if the two parties cannot compromise on packet prioritization in ways that allow both firms to move forward.

Each has investors to persuade, at the very least, and both face a more-uncertain framework as the Federal Communications Commission proceeds with its network neutrality proceeding, as that process seems largely deadlocked on the important issues.

Verizon, Google Net Neutrality Agreement?

A slightly different take on what Google and Verizon might have agreed on, as far as network neutrality rules, is offered by Washington Post writer Cecelia Kang.

As Kang describes the reported agreement, Verizon would refrain from offering paid prioritization to the biggest bidders for capacity on its DSL and fiber networks, essentially preserving a "best effort" access regime.

But Google and Verizon apparently also agreed that both could live with assured access tiers of service designed to optimize the performance of voice, video, conferencing, gaming or other services that are latency sensitive, at least on wireline networks.

Kang says the agreement does not cover wired networks.

Post Tech - Verizon, Google make net neutrality pact