[opendtv] Fwd: The internet is #^*#ed | The Verge

  • From: Craig Birkmaier <craig@xxxxxxxxxxxxx>
  • To: OpenDTV Mail List <opendtv@xxxxxxxxxxxxx>
  • Date: Wed, 26 Feb 2014 09:39:19 -0500

The language is crude. The story is all to familiar to those who watch the Bert 
and Craig show...

This long epistle sums up much of what we've been discussing lately.


The internet is fucked

Here’s a simple truth: the internet has radically changed the world. Over the 
course of the past 20 years, the idea of networking all the world’s computers 
has gone from a research science pipe dream to a necessary condition of 
economic and social development, from government and university labs to kitchen 
tables and city streets. We are all travelers now, desperate souls searching 
for a signal to connect us all. It is awesome.
And we’re fucking everything up.

Massive companies like AT&T and Comcast have spent the first two months of 2014 
boldly announcing plans to close and control the internet through additional 
fees, pay-to-play schemes, and sheer brutal size — all while the legal rules 
designed to protect against these kinds of abuses were struck down in court for 
basically making too much sense. “Broadband providers represent a threat to 
internet openness,” concluded Judge David Tatel in Verizon’s case against the 
FCC’s Open Internet order, adding that the FCC had provided ample evidence of 
internet companies abusing their market power and had made “a rational 
connection between the facts found and the choices made.” Verizon argued 
strenuously, but had offered the court “no persuasive reason to question that 

Then Tatel cut the FCC off at the knees for making “a rather half-hearted 
argument” in support of its authority to properly police these threats and 
vacated the rules protecting the open internet, surprising observers on both 
sides of the industry and sending new FCC Chairman Tom Wheeler into a tailspin 
of empty promises seemingly designed to disappoint everyone.

“I expected the anti-blocking rule to be upheld,” National Cable and 
Telecommunications Association president and CEO Michael Powell told me after 
the ruling was issued. Powell was chairman of the FCC under George W. Bush; he 
issued the first no-blocking rules. “Judge Tatel basically said the Commission 
didn’t argue it properly.”

In the meantime, the companies that control the internet have continued down a 
dark path, free of any oversight or meaningful competition to check their 
behavior. In January, AT&T announced a new “sponsored data” plan that would 
dramatically alter the fierce one-click-away competition that’s thus far 
characterized the internet. Earlier this month, Comcast announced plans to 
merge with Time Warner Cable, creating an internet service behemoth that will 
serve 40 percent of Americans in 19 of the 20 biggest markets with virtually no 

And after months of declining Netflix performance on Comcast’s network, the two 
companies announced a new “paid peering” arrangement on Sunday, which will see 
Netflix pay Comcast for better access to its customers, a capitulation Netflix 
has been trying to avoid for years. Paid peering arrangements are common among 
the network companies that connect the backbones of the internet, but consumer 
companies like Netflix have traditionally remained out of the fray — and since 
there’s no oversight or transparency into the terms of the deal, it’s 
impossible to know what kind of precedent it sets. Broadband industry insiders 
insist loudly that the deal is just business as usual, while outside observers 
are full of concerns about the loss of competition and the increasing power of 
consolidated network companies. Either way, it’s clear that Netflix has decided 
to take matters — and costs — into its own hands, instead of relying on 
rational policy to create an effective and fair marketplace.

In a perfect storm of corporate greed and broken government, the internet has 
gone from vibrant center of the new economy to burgeoning tool of economic 
control. Where America once had Rockefeller and Carnegie, it now has Comcast’s 
Brian Roberts, AT&T’s Randall Stephenson, and Verizon’s Lowell McAdam, robber 
barons for a new age of infrastructure monopoly built on fiber optics and kitty 

And the power of the new network-industrial complex is immense and unchecked, 
even by other giants: AT&T blocked Apple’s FaceTime and Google’s Hangouts video 
chat services for the preposterously silly reason that the apps were 
"preloaded" on each company’s phones instead of downloaded from an app store. 
Verizon and AT&T have each blocked the Google Wallet mobile payment system 
because they’re partners in the competing (and not very good) ISIS service. 
Comcast customers who stream video on their Xboxes using Microsoft’s services 
get charged against their data caps, but the Comcast service is tax-free.

We’re really, really fucking this up.

But we can fix it, I swear. We just have to start telling each other the truth. 
Not the doublespeak bullshit of regulators and lobbyists, but the actual truth. 
Once we have the truth, we have the power — the power to demand better not only 
from our government, but from the companies that serve us as well. "This is a 
political fight," says Craig Aaron, president of the advocacy group Free Press. 
"When the internet speaks with a unified voice politicians rip their hair out."

We can do it. Let’s start.


Go ahead, say it out loud. The internet is a utility.

There, you’ve just skipped past a quarter century of regulatory corruption and 
lawsuits that still rage to this day and arrived directly at the obvious 
conclusion. Internet access isn’t a luxury or a choice if you live and 
participate in the modern economy, it’s a requirement. Have you ever been in an 
office when the internet goes down? It’s like recess. My friend Paul Miller 
lived without the internet for a year and I’m still not entirely sure he’s 
recovered from the experience. The internet isn’t an adjunct to real life; it’s 
not another place. You don’t do things "on the internet," you just do things. 
The network is interwoven into every moment of our lives, and we should treat 
it that way.

"Common carrier rules are basically free speech."
Yet the corporations that control internet access insist that they’re providing 
specialized services that are somehow different than water, power, and 
telephones. They point to crazy bullshit you don’t want or need like free email 
addresses and web hosting solutions and goofy personalized search screens as 
evidence that they’re actually providing "information" services instead of the 
more highly regulated "telecommunications" services. "Common carrier rules are 
basically free speech," says the Free Press’ Aaron. "We have all these 
protections for what happens over landline phones that we’re not extending to 
data, even though all these people under 25 mostly communicate in data."

It’s time to just end these stupid legal word games and say what we all already 
know: internet access is a utility. A commodity that should get better and 
faster and cheaper over time. Anyone who says otherwise is lying for money.


None. Zero. Nothing. It is a wasteland. You are standing in the desert and the 
only thing that grows is higher prices.

70 percent of American households have but one or two choices for high-speed 
internet access: cable broadband from a cable provider or DSL from a telephone 
provider. And since DSL isn’t nearly as fast as cable, and the cable companies 
are aggressive in bundling TV and internet packages together, it’s really only 
one choice. And that means the level of innovation from these providers has 
almost completely stagnated, even as prices have gone up.

Why are cellphones so much cooler now than they were in 2000? Because Apple and 
Google and Samsung all had to fight it out and make better products in order to 
survive. They’re competing. Comcast hasn’t had to fight anything, at any time. 
It is fat and lazy and wants nothing more than to get fatter and lazier. That’s 
why Comcast is spending $45 billion on Time Warner Cable instead of integrating 
Netflix into its cable boxes and working with Apple and Google and Microsoft on 
the real next generation of TV: when you’re the only real choice in 19 of 
America’s 20 biggest markets, you get to move real slow and still make a lot of 
money. It's not clear Comcast even knows what real competition looks like.

"Unless the FCC thinks that there is a realistic chance that the deal will 
reverse two decades of rising prices, it should stop the merger," writes 
Columbia Law School professor Tim Wu. "Passing on savings has never been part 
of Comcast’s business model." Monopolies are nice like that.

Despite the innovation in phones, the same is true for mobile internet. There 
are only four major national carriers, most of whom run incompatible networks 
and all of which are stronger in various regions. If you hate your Sprint or 
Verizon service, switching to AT&T or T-Mobile is anything but simple and 
probably requires paying off a two-year contact of some kind. (Even T-Mobile, 
which is aggressively eliminating contracts for service, maintains a number of 
device payment plans that require a contract.) Chances are once you’ve chosen a 
wired broadband carrier and a wireless carrier that works well in your area, 
you’re stuck: there are few other places to go, and even if you have choices 
the high costs of switching mean you’re not very likely to leave at all.

(And if anyone tries to tell you that ultra-expensive mobile broadband is 
somehow competitive with wired service, ask that person to buy you a nice 
dinner and tell you the story of when they realized dignity had a price. You’re 
talking to a cable industry lobbyist; they can afford it.)

What happens in countries where there’s real competition? In the UK, where 
incumbent provider BT is required to allow competitors to use its wired 
broadband network, home internet service prices are as low as £2.50 a month, or 
just over $4. In South Korea, where wireless giants SK Telecom and LG Uplus are 
locked in a fierce technology battle, customers have access to the fastest 
mobile networks in the world — up to 300Mbps, compared to a theoretical max of 
80Mbps on Verizon that’s actually more like 15 or 20mbps in the real world.

Americans pay more for slower speeds than anyone else in the world
And Americans pay more for these slower wireless speeds than anyone else in the 
world: in Germany, where customers can freely switch between carriers by 
swapping SIM cards, T-Mobile customers pay just $1.18 per Mbps of speed. In the 
US, our mostly incompatible wireless networks lock customers in with expensive 
handsets they can’t take elsewhere, allowing AT&T and Verizon to charge around 
$4 per Mbps each and Sprint to clock in at an insane $7.50.

American politicians love to stand on the edges of important problems by 
insisting that the market will find a solution. And that’s mostly right; we 
don’t need the government meddling in places where smart companies can create 
their own answers. But you can’t depend on the market to do anything when the 
market doesn’t exist. "We can either have competition, which would solve a lot 
of these problems, or we can have regulation," says Aaron. "What Comcast is 
trying is to have neither." It’s insanity, and we keep lying to ourselves about 
it. It’s time to start thinking about ways to actually do something.


Mobile carriers like AT&T and Verizon love to pretend they are special flowers, 
the magicians who managed to fill our thin, empty air with the magic of 
wireless broadband. Mobile is so difficult, they argue, and spectrum so scarce, 
that any sort of check or oversight on their behavior would crater their 
delicate business and derail the entire industry.

This is nonsense, of course. If anything, we need to keep a sharper eye on the 
endless shenanigans of mobile carriers, because they pose a constant and 
growing threat to the overall health and innovative potential of the internet. 
The bad behavior is real, and it’s been happening for years: AT&T blocking 
FaceTime and Hangouts and Verizon knifing Google Wallet is just the tip of the 
iceberg. These industry behemoths also wield the wireless spectrum they lease 
from the public like a weapon, denying both competitors and potential 
competitors the most fundamental tool they need to get into the game.

The shenanigans of mobile carriers pose a Constant threat to the internet

Wireless executives will tell you they need to own as much wireless airspace as 
they possibly can, going on about a so-called "spectrum crunch" that has never 
really materialized: networks haven’t been brought to their knees by an 
apocalyptic wave of iPads with a voracious appetite for streaming video. In 
fact, cable companies bought a wide swath of prime spectrum in 2006, only to 
let it sit unused for years before flipping it to Verizon years later. Even the 
inventor of the cellphone denies that the crunch is a real phenomenon.

This shit is insane. It is unacceptable. The smartphone revolution was about 
putting a powerful computer and an internet connection in everyone’s pocket; it 
was not about creating a new class of economic gatekeepers with the unchecked 
power to control and destroy markets with zero oversight and little true 
competition. Famed venture capitalist Fred Wilson at Union Square Ventures has 
called the net neutrality situation a "nightmare" for startups trying to get 
funded, saying that he expects telecom companies to "pick their preferred 
partners, subsidize the data costs for those apps, and make it much harder for 
new entrants to compete with the incumbents."

And allowing these companies to get away with these antics has repercussions 
we’ve barely even begun talking about: a recent Pew survey found that 45 
percent of the poorest Americans use a mobile phone as their primary internet 
device. Same with nearly half of all Americans aged 18-29, and particularly 
among minorities and the less-educated. Young, poor, not white: let’s 
definitely make sure we put them in the ghetto internet of corporate control.


The Federal Communications Commission is ostensibly in charge of managing 
broadband deployment and regulating companies like AT&T and Comcast, but it’s 
shown no actual ability to do so in a focused and effective way — and when it 
tries, it does so in such a half-assed way that it gets smacked around in court 
and loses.

Part of the problem is historical: before former Chairman Julius Genachowski 
released the first National Broadband Plan after taking office in 2009, the FCC 
wasn’t even completely focused on the internet, and was mostly known for 
enforcing indecency rules on radio and TV stations, a role that reached the 
pinnacle of absurdity in 2004 when Janet Jackson’s nipple was exposed for just 
over half a second during the Super Bowl halftime show. The agency under 
then-Chairman Powell responded by wildly issuing indecency fines, ultimately 
resulting in ABC stations across the country declining to air Saving Private 
Ryan on Veteran’s Day for fear of government reprisal and yet another major 
loss in court when its indecency rules were found unconstitutionally vague in 

"Comcast and Verizon have taken all the reasonable options off the table."

Genachowski succeeded in shifting the agency’s entire focus to the internet, 
but he instantly crumpled in the face of high-powered telecom lobbying. 
Genachowski’s first attempt at net neutrality rules were framed the right way 
and classified internet service providers as common carriers, but the industry 
succeeded in utterly killing that plan by stoking political outrage at the idea 
of "regulating the internet" — resulting in the half-baked rules that just got 
thrown out because the FCC didn’t call broadband providers common carriers. 
"Comcast and Verizon have so much clout in Washington that they’ve taken all 
the reasonable options off the table," says the Free Press’ Aaron. "Regulators 
come at things sideways." Genachowski had the right ideas, but his soft-pedal 
tactics led to inherently weakened regulations — Cardozo Law School’s Susan 
Crawford called his approach a "house of cards."

The FCC also sat in the back seat when AT&T tried to buy T-Mobile, has remained 
virtually silent about the rumored linkup between Sprint and T-Mobile, and has 
offered little public comment about the Comcast / Time Warner deal — instead 
letting the Department of Justice take the lead in opposing these obviously 
anticompetitive mergers. The FCC’s stunning lack of presence and leadership 
during these watershed moments in communications history is an extraordinary 
failure for an agency that is officially tasked with protecting the consumer 

The FCC "doesn’t seem to have the confidence to stop a merger," says Columbia’s 
Wu. New FCC Chairman Tom Wheeler has "to be willing to take the heat," if he’s 
going to get involved, says Aaron. "If you’re going to take this job, you have 
to lead," he says. "The whole reason we have an independent agency is to shield 
it from Congress."

But there are no rules shielding the FCC from the companies it’s supposed to 
regulate, leading to an uncomfortable pattern: FCC commissioners are drawn from 
the ranks of industry lobbyists, while industry lobbyists are drawn from the 
ranks of FCC commissioners. Current Chairman Wheeler has served as president 
and CEO of both the NCTA cable lobby and the CTIA wireless lobby; former 
Chairman Powell is now the current president and CEO of the NCTA; former 
Commissioner Meredith Baker, who voted in favor of the Comcast / NBCUniversal 
merger, is now the head of Comcast’s DC lobbying office. "I think for the top 
jobs the industry can veto people who they might think would be too hard on 
them," says Wu. "After all, it’s their agency."

"The FCC is scared of one thing: actual people."

This cozy relationship leads to the repeated insistence that consumer 
protections are too difficult to implement, even when they’re not complicated. 
"Somehow when they’re pushing through unpopular things that a few big companies 
want, the FCC can do it," says Aaron. "But when it’s things the people want 
that the corporations don’t, it’s suddenly impossible."

But not all hope is lost. "The FCC is scared of one thing: actual people," says 
Wu. "When they sense that something is a popular issue suddenly the FCC is 

So there’s the entire problem, expressed in four simple ideas: the internet is 
a utility, there is zero meaningful competition to provide that utility to 
Americans, all internet providers should be treated equally, and the FCC is 
doing a miserably ineffective job. The United States should lead the world in 
broadband deployment and speeds: we should have the lowest prices, the best 
service, and the most competition. We should have the freest speech and the 
loudest voices, the best debate and the soundest policy. We are home to the 
most innovative technology companies in the world, and we should have the 
broadband networks to match.

We should stop fucking it up.

"There is much greater consensus around the fundamentals of the open internet 
than this binary up and down debate that’s going on," says former FCC Chairman 
and current NCTA President Michael Powell. "There is common ground to find an 

Free Press president Craig Aaron is blunt. "What we need right now is decisive 
action," he says. "We can still unfuck the internet."

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