Sleepycatz

Neutral Monopolies

I have been asked by some journalists and others to comment on the recent actions taken against Comcast and their policy of interfering with peer-to-peer application traffic. Of course, the problem with journalists and policy makers is that they don’t want to understand the real issues involved; they simply want to setup a black and white polemic and decide which side is right. In this case, everyone is wrong.

The whole thing began about a month ago when the AP reported that Comcast was blocking traffic associated with BitTorrent, GNUtella, and other file-sharing applications. In a semantic parsing that would please even the most jaded pentagon technocrat, Comcast denied that they were blocking any traffic. In actuality, Comcast wasn’t really blocking traffic; they were simply imitating traffic in order to get the sharing computers to ignore the data sent between them. This approach is quite a bit sleazier then actually blocking the traffic, as it forces the hosts to keep establishing their connections to one another. Nonetheless, the die was cast, and consumer groups filed a complaint with the FCC and called for congress to impose Net Neutrality regulations. Meanwhile, hordes of libertarian network operators began complaining about how the government shouldn’t interfere with how they run their networks. Three days ago the story got bigger when a California resident filed suite against Comcast for breach of contract, arguing that Comcast does not deliver the promised Internet speeds it advertises, and actively interferes with the performance of certain applications.

The issues and problems surrounding this debacle are an outgrowth of the severely flawed telecommunications policies of the FCC and the federal government’s failure to deal with those bad policy choices. Comcast should to have the right to regulate traffic allocation on their own network. The nature of the HFC architecture employed by cable Internet providers means that limited bandwidth is shared within local distribution areas. This means that if your neighbor is using huge amounts of bandwidth to download an episode of Lost, there is less overall available bandwidth for you. Cable operators want to ensure that burst bandwidth is available to users, so they set the cable modem’s overall limiting quite high (usually between 4 Mb/s & 8 Mb/s); however, this leads to the problem of active users consuming large amounts of bandwidth for extended periods. In the case of peer-to-peer applications, Comcast was trying to ensure that there was excess burst bandwidth available to more casual users of common Internet applications. However, Comcast should have informed their customers that they were limiting specific traffic and applications. By not doing so, they operated in duplicitous and deceitful manner. This is a clear case of Comcast wanting to have it all: they want to pick up subscribers by touting high bandwidth numbers and then limit the users who actually use the bandwidth they’re paying for.

To allow the federal government, however, to dictate what is valid network traffic could lead to disastrous consequences. To be adaptable to the ever changing applications and protocols on the Internet any legislation would need to be written broadly. This could easily lead to situations in which it becomes technically illegal for service providers to mitigate spam, intervene in a virus outbreak, or prioritize voice or video traffic. For many years the Internet community of operators and developers have done an exceptional job of regulating and expanding the applications and data on the Internet. This was primarily due to the need of numerous network operators being forced to work together to exchange data and adhere to standards. Recently this has started to change; however, as the number of autonomous carriers has begun to shrink. This has placed business pressures on the remaining networks to try to keep more traffic and services on their networks and worry less about exchanging data with others.

The overall problem is that there is a lack of competition in the marketplace. If subscribers had multiple choices of broadband providers they could choose a provider based upon their application needs. Network Neutrality only becomes an issue because last mile monopolies have been encouraged by the FCC. With the loss of data line sharing requirements for copper, coax, and fiber, consumers are left with very few choices between Internet providers. Additionally, the deregulation of last mile data facilities means that no company can enter into the market to satisfy customer demands. For instance, a service provider who wishes to target peer-to-peer users cannot, economically, gain access to the copper or coax wire entering your home. This means that consumers will always be tied to one or two service providers and their policies. If competition was encouraged in this market, questions of Network Neutrality would not even arise. Consumers would simply change providers from those who do not satisfy their needs to those which do. The FCC, with their unique brand of logic, keeps insisting that fewer providers means more competition and better products for consumers. In any other market this logic would be dismissed as laughable: do we really believe we would have better automobiles if there were only two or three manufacturers? But in the world of telecommunications this ass-backwards logic seems to be accepted as gospel –proselytized with massive political contributions.

Without re-regulation of last mile facilities the only hope consumers have is Network Neutrality legislation. Network operators and admins should work with lawmakers to try to ensure that any regulations are adaptable enough to address their concerns. If operators, and the companies they work for, simply continue to oppose Neutrality regulation they will soon find themselves having to interpret poorly written regulation and hope that no one complains when they get it wrong. This is simply a case where consumers are not going to stand for biased monopolies, and the monopolies will have to get used to operating in a more neutral fashion.

Episode V: The Empire Strikes Back

I have written several times in the past about AT&T’s questionable treatment of content in order to further their own business agenda. Now comes word that AT&T is officially enshrining their policies in their Terms of Service agreement with AT&T users. As Slashdot reported a few days ago, the updated ToS includes the following terms:

AT&T may immediately terminate or suspend all or a portion of your Service, any Member ID, electronic mail address, IP address, Universal Resource Locator or domain name used by you, without notice, for conduct that AT&T believes (a) violates the Acceptable Use Policy; (b) constitutes a violation of any law, regulation or tariff (including, without limitation, copyright and intellectual property laws) or a violation of these TOS, or any applicable policies or guidelines, or (c) tends to damage the name or reputation of AT&T, or its parents, affiliates and subsidiaries.

The breadth of this statement is amazing. As AT&T partners with the Chinese government, would it now be a violation of an AT&T service agreement to criticize the Chinese government? Could one have their DSL connection terminated for publicly questioning their telephone bill?

The AT&T apologists and defenders immediately jumped on this change of the ToS, claiming, once again, that this is obviously an over-reaching mistake by some middle manager, and that, under common-carrier laws, the ToS is unenforceable and would be struck down in court. My response to these people, the same one’s who claimed the Pearl Jam incident was simply an over-reaction by a middle manager, is to ask: how many of these anti-consumer actions does it take constitute evidence of a subtle or general anti-consumer corporate policy? one?, three?, twelve?, twenty? Let me know an I will assemble the requisite documentation. As to the issue of common-carrier regulations, commentators are correct that under those regulations AT&T must remain neutral to general content. However, it is most likely that should push come to shove that AT&T will claim itself to be a Media Organization not held to common-carrier standards. After all, no one would expect Viacom to carry content which damaged their brands, why should AT&T?

There are a number of people whom I respect who disagree with me on the issue of Net Neutrality. Most of them believe that market forces will respond and correct any anti-consumer moves by Internet providers. I believe this would be true, if there existed diverse competition in the marketplace. The problem remains that a very few number of large carriers control last mile access to the Internet. Among these carriers there is little geographic competition, except in major urban centers. Opponents of neutrality site RF distribution as a way to alleviate this problem. However, given the FCC’s recent rulings on the spectrum auctions it seems most likely that the same large companies which control hardline distribution will end up in control of the RF spectrum as well. As congress has done very little to mitigate media and telecommunications consolidation, and will certainly not address this issue in the near future, the only solution left is to impose a Network Neutrality law upon Internet carriers. It is the only solution left for an industry which appearing more and more monopolistic every day is not afraid to flex it muscles on content control.

The Wall Lengthens

A few days ago, I wrote about how AT&T censored anti-administration lyrics from Pearl Jam’s webcast. The Chicago Sun Times is now reporting that this was not the first instance of AT&T’s squelching of music questioning the Bush administration:

AT&T’s Blue Room Webcast also had silenced comments during two performances at the Bonnaroo Festival in Tennessee last June, cutting remarks by the John Butler Trio bemoaning the lack of federal response to Hurricane Katrina and comments about Bush and the war in Iraq by singer Wayne Coyne of the Flaming Lips.

“The sound did not cut out at any other time — only when someone was talking about George Bush or the government in a negative way…” AT&T did confirm that other, unspecified political comments have been cut from its Webcasts.

The Daily Swarm is also collecting anecdotes and evidence of further AT&T censorship. A number of the comments suggest that the practice is even wider spread then first thought.

As Jon Stokes pointed out, AT&T’s argument against Net Neutrality legislation has been simply “trust us.” AT&T’s actions have shown, many many times, that they cannot be trusted. It should concern all of us that AT&T — with the encouragement of the FCC — continues its unregulated, monopolistic, expansion. They have shown that they are more then willing to censor political content. Whether the censorship is done for either business or ideological reasons is still unclear, but AT&T has greatly benefited from the administration’s FCC board members. As I said previously, AT&T has completed most of the wall to censor content on the Internet, it is now simply beginning to filter at the gates now.

Fashion Police

At a time when people are beginning to realize the massive abuse and problems caused by the current intellectual property laws, in steps congress to expand and further confuse the system. Just prior to his summer vacation, Sen. Schumer (NY) introduced the Design Piracy Prohibition Act of 2007. Like pretty much every bill introduced in congress for the last 10 years, the name of the act has almost nothing to do with its function, and the small amount of media coverage of this bill has been erroneous at best. Of course, getting the media to intelligently cover copyright, or Internet issues for that matter, is like teaching  cats to play chess: they’ll knock around the pieces to amuse themselves, but will never understand the game.

Though billed as a piracy protection act, the bill goes far beyond that. Fashion designers are currently protected from knockoffs and piracy through trademark enforcement of their brands. One cannot, for instance, sell a leather handbag labeled as Coach if it is not made by Coach. Trademark enforcement is the bread and butter of litigation in the fashion world. Additionally, a designer may copyright a fabric pattern design under the existing classifications. This requires anyone wishing to use the pattern in their clothes to obtain a license from the copyright holder.

Schumer’s bill adds fashion design to existing copyright laws as an area of protection. This is a bureaucratic nightmare and a litigious boondoggle in the making. The proposed law defines the following as items protected by copyright:

A ‘fashion design’ is the appearance as a whole of an article of apparel, including its ornamentation.

The term ‘design’ includes fashion design, except to the extent expressly limited to the design of a vessel.

The term ‘apparel’ means:

an article of men’s, women’s, or children’s clothing, including undergarments, outerwear, gloves, footwear, and headgear; handbags, purses, and tote bags; belts; and eyeglass frames.’.

If this seems a bit ambiguous, you’re right. There is nothing denoting what constitutes an original design or the extent to which it is protected. For instance, if a designer attempts to copyright a pair of green pants with red pockets can they sue another designer who sells a pair of blue pants with red pockets? For that matter, does simply having a different colored pocket allow an item to protection, or has the idea been in circulation long enough it is public domain? Finally, how may ways are there to design a pair of pants, or a handbag, or a dress, or eyeglasses which does not derive from previous works? Unfortunately, questions like these an many many other will have to be answered through lengthy, complicated, litigation if the bill becomes law.

Finally, the fashion industry has survived and even thrived with a lack of intellectual property controls until now. As Kal Raustiala and Chris Sprigman pointed out last year in their paper “The Piracy Paradox: Innovation and Intellectual Property in Fashion Design,” the lack of intellectual property protection has actually forced the fashion industry to be more innovative and competitive then those industries with strong protections.

In recent years copyright law has become a cesspool of highhanded litigation and threats. The protection of intellectual property is suppose to allow for fair compensation to creators in order to encourage innovation. However, the opposite is becoming the norm. Innovation is being stifled by copyright litigation and confusion. To add, as Sen. Schumer wishes, fashion design to this already deepening pool is simply to add further litigation, and stifle competition and innovation. This bill will not give additional protection to designers from piracy, but simply add costs and create havoc in a marketplace is actually working quite well.

The Wall

Last weekend during the Lollapalooza webcast AT&T decided that some improvisation by Pearl Jam was just too questionable to be sent out over the Internets. AT&T decided that when Eddie Vedder sang out, to tune of Pink Floyd’s The Wall, “George Bush, leave this world alone;” “George Bush, find yourself another home.” it would offend some listeners and simply cut the audio.

To anyone who is familiar with AT&T, or with the debates on Net Neutrality, the only surprise should be that AT&T choose this moment and this event to exercise its authority. AT&T has been notorious in aiding the government in it’s wiretapping efforts and has received unparalleled support from the FCC to create a content carrier monopoly. In fact, one is hard pressed to think of a major FCC decision in the past five years which was not in AT&T’s favor. I am not suggesting that there is overt collusion between the two parties; simply, that AT&T knows which side it’s better off supporting in order to expand its business and eliminate competition.

AT&T’s decision to censor Vedder was probably a mistake, at this time. The result of a content manager overly eager to begin his new job as Internet supervisor. To their credit, Pearl Jam issued a strongly worded press release condemning AT&T and calling for greater support for Network Neutrality legislation and greater competition. Of course, the irony that AT&T choose to censor improvised lyrics to The Wall should not be lost on any of us. The album’s themes are ripe with overtones of fascism and repression. As Gerald Scarfe, the great illustrator, said of the album: “In the shadow of the wall, flowers turn into barbed wire; men turn into monsters.”

Make no mistake, AT&T will continue to use their facilities to control content in order to censor any type of speech which could be seen as detrimental to their business aspirations. For them, it is not a political issue, or a free speech issue but simply one of business growth and market control. For those of us who see the Internet as the new hope of free speech AT&T’s actions should strike terror into our hearts. At this time they have nearly every right to control and monitor any content delivered on their network; there is no law preventing them from simply discarding any traffic which delivers content critical of them, or the government whose support they so need. A wall of censorship has already been erected by the lack of action by our government — we are only awaiting the closure of the gates. It is time we demanded that the wall be torn down.

Red, White, and Tubes

This week the Communications Workers of America released its report on broadband speeds across America. It’s a sobering document which should serve as an indictment of the entire American telecommunications model. However because their methodology relied upon users running their own speed test, the defenders of the status quo will claim the findings are unreliable. If anything the findings in the report paint a significantly brighter picture then what’s actually occurring.

For nine months the CWA collected bandwidth statistics at speedmatters.org. The results were broken down geographically, first by country:

Then by state:

CWA’s statistics are actually skewed in favor of higher connectivity rates then most people have. Approximately 30% of all Internet subscribers in the US continue to use dialup which is not recorded by this survey. Additionally, the survey relies upon a sophisticated user to participate — this alone skews the sample to broadband adopters.

Overall, the US continues to remain outside of the top 10 industrialized nations in broadband penetration. This statistic is further degraded by the FCC’s definition of broadband service as data transfer services exceeding 200 Kb/s in a single direction — significantly less then the 10 Mb/s - 20 Mb/s symmetrical connectivity becoming the standard throughout Europe and Asia. Furthermore, Americans pay more for their Internet then those in other wired countries: American’s pay about a dollar per 92.4 Kb/s where that some dollar in Europe and Asia averages 1.97 Mb/s - this does not take into account the additional voice and television services provided by the European model.

So why does any of this matter? It is no coincidence that America has dropped in global technology innovation to number two, behind Denmark. Denmark is currently ranked, by the ITU, among the top three countries in broadband adoption. Future and even current economies will depend upon high speed Internet access for growth and innovation. The current US model relies upon major carriers seeking high profit for minor deployments. There is presently no national plan to create a broadband infrastructure; in fact, states which have pursued such plans have been sued and heavily lobbied by large carriers to abandon their ideas.

High speed Internet access has the potential to revolutionize our economy — creating new media and advertising markets and competition. It has the potential tore-invent our entire entertainment industry and change the way in which companies and employees relate to one another. It is, in essence, akin to the industrial revolution in scope and force. Whether or not America chooses to participate in the revolution from the outset, or be left behind, is really a matter of governmental policy and not one of ‘market regulation’ (as corporate supporters would argue). High speed Internet infrastructure needs to be understood as similar to the national highway system. A system which facilitates transportation and commerce. It cannot, and should not, be viewed as a private toll road which benefits the few at the expense of national growth and innovation.

A New Hope

Today two FCC commissioners, Jonathan Adelstein and Michael Copps, refused to rubber stamp the DoJ’s unconditional approval of AT&T’s acquisition of BellSouth. This could be a landmark event. As FCC chairman Martin, who has never seen a consolidation he didn’t love, finds himself with a split board. Commissioners Martin and Tate are pushing hard to approve the acquisition without any stipulations; while Commissioners Adelstein and Copps have expressed realistic concerns about the DoJ’s approval, and what effect the consolidation would have on competition. Commissioner McDowell has to abstain, under FCC regulations — due to previous employment with both AT&T and BellSouth. Without support from one of the Democrats, the merger is dead. Martin, of course, won’t allow this to happen, and he is, no doubt, more then willing to trade off conditions to allow the merger to proceed — he has already proposed allowing competitors access to 30 commercial buildings in Bellsouth territory; a facile concession at best.

There can be little doubt that enormous pressures are being applied to Adelstein and Copps tonight, as the commission is scheduled to meet again tomorrow to deal with the two most important items from today’s agenda: the acquisition, and Net Neutrality.

There is some, small chance, that Copps and Adelstein will hold out for a enforced Net Neutrality stipulation to allow the merger to proceed. It is critical that the commissioners be contacted about these issues:

Commissioner Michael J. Copps

Commissioner Jonathan S. Adelstein

Update:
Apparently, not enough arm twisting was applied to Copps and Adelstein last night. Commissioner Martin canceled today’s special meeting — meaning he was unable to get the one of the two holdouts on board. Martin has rescheduled the vote for November 3rd. This gives every one plenty of time to contact Comissioners Copps and Adelstein, and inform them of our concerns regarding the future of both the Internet and telecommunications in the US.