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The FCC, Net Neutrality and the Future Enrons of the InternetPosted on Feb 24, 2011
(Page 2) The sponsor of H.AMDT.80, Rep. Walden, might need a refresher on that point. In a release cited by The Washington Post, he said, “We all want an open and thriving Internet. That Internet exists today. Consumers can access anything they want with the click of a mouse thanks to our historical hands-off approach. ...” Republicans and libertarians may claim that the Internet evolved in a perfect free market, but that is wrong at best, and a lie at worst, when one is considering the ISP backbone. Indeed, the U.S. ISP system has more in common with traditional monopolistic utility companies than a free market. The facts are clear. A very small number of companies control the critical hubs and cross-country lines within the United States. Most U.S. consumers have only one to four choices of broadband providers for their homes or businesses. And the ISP system itself grew out of government-sponsored university and military projects, and it has always been governed by quasi-governmental organizations such as ICANN. Moreover, huge multinational conglomerates have successfully lobbied to restrict many consumer freedoms on the Internet. The music, film and software industries have spent countless millions to ensure that consumers, content providers and even ISPs must follow complex and extremely restrictive copyright and trademark laws. Advertisement So, what should be done? The debate, assuming there is still room for one, should start with a look at the incentives built into the system. How can society incentivize private companies to provide fast, reliable Internet service to consumers and businesses? That seems like a simple enough proposition. One possibility is a 21st century version of the Glass-Steagall Act. Under such a system, ISPs would be allowed to have only “one” customer: a client who would connect directly to them for Internet access. The ISP would be allowed to charge any reasonable price for this network connection, with the price being based on the speed of the connection or the amount of data transferred. But the ISP would be blocked from owning any media companies. And the ISP would also be blocked from imposing any surcharges based on individual usage preferences (e.g. which website or video the user was viewing). In other words, the ISP would be forced to function like the telephone companies of the 20th century. They would supply the line. The customer would “fill” it. How could this possibly be fair? Well, again, the ISPs are effectively monopolies, and perhaps should be treated as such. Let them do one thing, and one thing well. Another possibility is to set up different rules for average Internet consumers and large companies such as Google. Under this vision, consumers would be protected by the FCC or some other government regulator. Large companies, such as Verizon and Google, would be free to enter into whatever complex private agreements they choose. Ideally, such a system would include some sort of regulator that could ensure that markets were marginally competitive, much as the TV networks were regulated in the 20th century. The danger of this system is that it would resemble the banking system right before the collapse of the economy in 2008, but it might be a more stable model when applied to the Internet than to money. A final possibility is that the Democrat-backed FCC rules might not be so bad after all, at least as a starting point. According to a Washington Post story, the FCC has said its rules are designed to protect consumers, and may not apply to the largest Internet pipelines, which are already governed by secret, private “peering” contracts. (Data traveling across the Internet almost always passes through several “peered” networks before terminating in the homes and businesses of consumers.) Congressional Democrats have also offered reasonable defenses of the FCC rules, with Rep. Edward Markey issuing the following statement: “The [FCC] rules make three simple promises. One, to consumers: that we can visit any website we want using any service we want on any device we want. Two, for innovators: that they can create tools without getting permission from the government or the company that the consumers use to get online. Three: that we put a cop on beat, to make sure that both sides are doing what they’re supposed to and to be a neutral arbitrator. That’s all they do.” I think Rep. Markey is oversimplifying it a bit, but the rules could be massaged until they were that good. In any case, as of this week, the Republican-led House of Representatives has voted against any government regulation of the Internet backbone. This is a mistake, and it is a position driven by dirty money, blind ideology, or both. For his part, Walden has said that his next action will be pushing for a joint resolution permanently blocking the FCC’s Internet rules. (The Congressional Review Act of 1996 allows Congress to overturn rules and regulations issued by the executive branch.) On the other hand, it would be foolish to give the FCC unlimited authority to muck up the freedom of the Internet. I think—I hope—we are smart enough to find a compromise solution. Derek Lazzaro is an attorney and university administrator in Los Angeles. He studies and writes about free speech issues, U.S. national security, the 2008 financial crisis, real estate, and technology. CommentsAre you a Truthdig member yet? Login now, or register with Truthdig. Add Your Comment |
By pyrrhon, March 1, 2011 at 10:53 am Link to this comment
When the other media forms, newspapers and TV became a threat to the way our government rules, the corporations purchased control. Since it is not easy to purchase control of the Internet, they will make sure that they can control content.
Report thisRule of human behavior: When men are left to their own devices, they behave badly. That is why we have laws. Regulation is just another word for law.
By Virginia777, March 1, 2011 at 2:09 am Link to this comment
I agree with everything you say Rgyle, thank you for your thoughts.
And yes, they have nothing good to offer but
destruction, I know this for a fact, and I sure hope they ultimately will turn on themselves.
I will keep fighting but the ferocity of the opposition is scary, many more people need to get involved in fighting back.
Report thisBy Rgyle, February 26, 2011 at 2:21 pm Link to this comment
Virginia777, you took that out of context. I’m not conceding defeat. The point is
they will destroy until they can’t anymore. The process is accelerating and will
not take as long as you indicate. We’re living now on the echo of a better time,
blowback is imminent. Humanity must get real, at least enough of us to make a
big shift. The question about who wittingly or unwittingly wants to go down
with them is for all of us to ask and answer ourselves.
By all means fight ‘em. I’m fighting Chase Home Loans right now. But I also see
the beginning of the end for the dark ones. They have nothing good to offer but
destruction, which ultimately will turn on themselves. Think how pitifully empty
the laughter on their yachts must be…
With love in one’s life, one easily takes delight in the simplest things. That
Report thisalone is a great victory.
By Virginia777, February 26, 2011 at 1:33 pm Link to this comment
I wanted to address this point:
“it would be foolish to give the FCC unlimited authority to muck up the freedom of the Internet.”
The “freedom” of the Internet, has allowed for never before levels of disinformation, lies, slander, libel, racism, hatred and cruelty to exist in contemporary media.
I’m all for free speech, but where is the Left when it is used to make death threats and spew hatred, not to mention disinformation and criminal activity? The Left has supported unregulated free speech on the Internet, and then not applied any vigilance, or hardly any, to the massive spread of disinformation and hatred on the Internet. Its logic and advice, has often been to ignore it. Which is no logic at all.
That is like saying there is a massive fire burning, and believing fires have the “right” to burn, so to ignore it to keep the “rights” of fires in place.
Report thisBy Virginia777, February 26, 2011 at 1:20 pm Link to this comment
I don’t necessarily agree with this:
“maybe letting them referee their own game will hasten the process to its tragic end.”
Refereeing their own game is exactly what they have been doing, what is needed are people willing to fight back. The problem won’t solve itself, the players won’t destroy themselves, and even if this potential exists, it will take so long to happen our country will be left in tatters.
Fighting back is not easy and I can more than vouch for this, these people are brutal and tough and empowered. What is needed is real courage and strength and the willingness to take corporate America and the military industrial complex, head-on.
Report thisBy Morpheus, February 25, 2011 at 8:34 pm Link to this comment
The people in this country will eventually get fed up. We are all tired of being screwed. What are we to do?
“JOIN THE REVOLUTION”
Read “Common Sense 3.1” at ( http://www.revolution2.osixs.org )
Report thisWe don’t have to live like this anymore. “Spread the News
By berniem, February 25, 2011 at 7:02 pm Link to this comment
Congress is nothing but a shill for the corpoatocracy and the plutocrats that own them! We live in a neo-fascist country under the delusion that we actually have control over our governance. Those who see thru the sham are derided and quieted using varying degrees of coercion and the rest of the citizenry has been made too afraid and dumbed-down to seriously question what is being done to them here at home and in their name abroad! FREE BRADLEY MANNING!!!!!
Report thisBy Rgyle, February 25, 2011 at 3:48 pm Link to this comment
Addicts won’t stop until they’ve destroyed enough, maybe even themselves. So
maybe letting them referee their own game will hasten the process to its tragic
end. Who of the media-entranced minions wants to go down with them?
Lafayette: Brilliant commentary, thanks.
Report thisBy John in Kerrville, February 25, 2011 at 3:41 pm Link to this comment
The deregulation disaster is usually blamed on the Reagan Administration.
Report thisActually it started earlier, with the abolishing of the Civil Aeronautics Board during
the Carter Administration. We should blame Henry Kahn, the Economist at Cornell
University, who gave me a D!
By Virginia777, February 25, 2011 at 2:57 pm Link to this comment
There are no future Enrons of the internet, they are here already.
Report thisBy Lafayette, February 25, 2011 at 4:59 am Link to this comment
The rant on this thread is rife.
Remember, gridlock works both ways. The bill as written/voted in the House will have tough going in the Senate.
And even if by some miracle it makes it to the Oval Office, it will die there. Or be seriously modified by a line-veto.
No, they (the Replicants) do not hold all the marbles.
Report thisBy Lafayette, February 25, 2011 at 2:27 am Link to this comment
MARKET OLIGOPOLIES (Part 1)
CAVEAT
I am no enemy of capitalism. It is “natural”, meaning it reflects best the mechanism by which mankind seeks and creates value that is shared by the collective (community, city, state, nation) as a whole.
But, capitalism, when justified by Free Enterprise, can get very wrong the distribution of the value generated. Let’s see how.
TWO OLIGOPOLIES:
The US Health Care Market
The US Health Care Insurance map of the US, which indicates the fundamental lack of competition is found here.
The “Bell System”
The US made the decision to break up MaBell into the regional BabyBells, which simply instituted the MaBell monopoly on local telephony in the regions.
Let’s not forget that “MaBell” (the system established as a result of the invention of Alexander Graham Bell) was a company largely regulated by the FCC, because it was a monopoly. Some facts:
* In 1934, the government set AT&T up as a regulated monopoly under the jurisdiction of the Federal Communications Commission, in the Communications Act of 1934.
* In 1949, the United States Department of Justice alleged in an antitrust lawsuit that AT&T and the Bell System operating companies were using their near-monopoly in telecommunications to attempt to establish unfair advantage in related technologies, especially the fledgling computer industry.
* The 1984 Bell System divestiture brought an end to the affiliation branded as the Bell System. It resulted from another antitrust lawsuit filed by the U.S. Department of Justice in 1974, alleging illegal practices by the Bell System companies to stifle competition
* Bell System Divestiture: Before the 1984 break-up, the Bell System consisted of the companies listed below (see here ). These companies were divested from AT&T in 1984, except as noted. The former operating companies of the Bell System listed below are organized according to the current owners of the companies (or their successors). Almost all of these companies belong to AT&T, Verizon, or Qwest, the three remaining Regional Holding Companies (RBOCs).
Just like the Health Care situation, noted above, this market is an oligopoly.
Report thisBy Lafayette, February 25, 2011 at 2:25 am Link to this comment
MARKET OLIGOPOLIES (Part 2)
MY POINT
Oligopolies have been the central thrust of market consolidation in the US for two purposes; the first of which is to obtain economies-of-scale from which large operations benefit and the second being that such larger operations derive higher profit levels. Thus derives bonuses and equity capital gains for the TopManagement that run the companies.
Yes, of course; dividends do show up in the asset portfolios of equity holders. (It is estimated that about half of all profits are shared between the companies (that do not distribute them, but keep them for internal disposition, and dividends rendered to equity holders. It will surprise no one to understand that the first instance can be measured in thousands and the latter in millions – so is that sharing out “equitable”? And that case is even more acute in market oligopolies or monopolies.
Supposedly, these profit levels are to be “self-regulating” due to the market mechanism of competition. However, as regards an oligopoly, such is not the case. In fact, as regards the two markets (Health Care and Telephony) we find that both can and are monopolistic, which is even worse.
The notion therefore that Free Enterprise also means the ability to price-gouge market oligopolies/monopolies for the personal gain of a comparatively small group at the expense of the general public is pure greed - once again raising its ugly head as it did in the Subprime Mess.
An oligopoly is also the reason why the US has some of the highest ISP-tariffs of any modern world. Contrary to popular Replicant belief, there is insufficient competition in the market for Internet access.
FOR ANOTHER DAY
How Microsoft became a “natural monopoly” in the market for personal computing Operating Systems. A modern tale along the lines of “Ma Bell”.
POST SCRIPTUM
In European countries, the government run Telephony Service was devolved to a private company, but only the telecom network, for which everybody pays a fixed line modest fee (that covers maintenance, renewal and development). However, the private company is obliged to allow any ISP to interconnect - meaning ISP fees are highly competitive.
Report thisBy Virginia777, February 25, 2011 at 1:10 am Link to this comment
Be afraid, be very afraid. The reason they don’t want to regulate the internet is that they are attempting to Control the internet via extremely devious methods. For instance, I have been pummeled online ever since I published this Open Salon post, asking whether Topix was sharing its user’s data with the NSA. Topix has SO over-reacted, I have to assume I was dead-on here:
http://open.salon.com/blog/virginia888/2010/12/02/is_topix_giving_out_users_personal_data_to_the_nsa
And check these posts out. Guess who is investing in identity-hiding software development to allow for trolls to invade social media:
http://www.rawstory.com/rs/2011/02/22/exclusive-militarys-persona-software-cost-millions-used-for-classified-social-media-activities/
Sure they don’t want regulation, that way they can carry on with the covert activity they are sponsoring. Yikes!
Report thisBy rtb61, February 24, 2011 at 11:25 pm Link to this comment
People just don’t realise how bad a business model based upon extortion and censorship will get before the government does something about it, right about that point that the US becomes a global laughing stock as it’s communication services start to collapse as a result of across the board retaliatory slow downs and disconnections.
Report thisBy Alan, February 24, 2011 at 8:22 pm Link to this comment
(Unregistered commenter)
True Untrue Stories.
Reported by: Your Man in/on/under The Street
Feb. 24, 2011
FOX-Comcast Merger to install Limbaugh not only
as bad ass mouth piece, but also as chief internet
throttle jockey.
A scene from things to come:
Report this-Well, ditto heads, copy this! I’ve now got my
hand on the master internet throttle.
Watch this… FOX stream…okay..bOOST priority…
...hmmm..truthdig.com..who the hell are they?...
why I don’t see’m on my demote priority on sight
list…oh…there they are…okay..THROTTLE
priority! squeeze throughput! quarantine packets!
Okay ditto heads, copy this! We’re back to
our enlightening incitement chat now that we have
net-neutered the opposition!
By Leefeller, February 24, 2011 at 4:33 pm Link to this comment
Here here Queenie stated, “I have lived quite a while without tv. I can do the same without my pc.”
Actually I have lived quite a while without watching TV, and I may have to do the same with gas and food shortly, I suspect the pc will be first.
Report thisBy Curtis Bash, February 24, 2011 at 2:26 pm Link to this comment
(Unregistered commenter)
The radicals have won and none of leaders have the courage to stand up and fight for us so now if you care about your freedom you’ll to get up off your lazy chair and do something about. Start a petition, sign petition, do something but don’t bitch about it because it is your fault. They have taken over the media and now propaganda will rein.
Report thisBy SarcastiCanuck, February 24, 2011 at 12:34 pm Link to this comment
(Unregistered commenter)
Yo,look what happened when they de-regulated the banks.Middle class America got it straight up the keester and are still hurting.Now get ready for the internet goose.Remember regulating corporations isn’t communism or even socialism,it is survivalism.Survival from the corporate predators that squeeze every dime that they can out of you….Your government’s prime responsibility is to protect its citizens,which it seems to have forgotten;Or they’re on the take,you decide..You guys have to bitch louder at your alleged leaders.Remember,they work for YOU!!!
Report thisBy Queenie, February 24, 2011 at 12:03 pm Link to this comment
Wrong! Both sides do NOT have valid points. The internet needs to be open to all without corporate interference, in as far as that is possible.
The corporate world is a pit of vipers. Look what happened to the cable tv with its “tiered” services. 200 channels- all crap- while we have to go overseas to get real news or decent entertainment.
I have lived quite a while without tv. I can do the same without my pc.
Report thisBy SoTexGuy, February 24, 2011 at 7:15 am Link to this comment
Whoa! Enron? That’s ancient history! We’ve all moved on from those dirty days of profit first and let grandma freeze to bump up the transmission rates.. right?
More seriously, this is an informative article and I thank the author.. but about the move by the Legislature to defund or prevent big bad government from intervening in internet matters.. What hooey!
When Homeland security or the CIA or the NSA wants to block or tap anything they’ll do it (are doing it) with the help and cooperation of these businesses.. and we won’t even have the privilege of knowing about it… If it turns out to have been illegal then Congress will step in and give everybody a retroactive hall pass.
.. oh no? They just did it after the flap overt all our phone traffic being routed through a big secret computer somewhere..
It’s a Modern World!
Report thisBy Miko, February 24, 2011 at 4:50 am Link to this comment
(Unregistered commenter)
The analogy in the title is ridiculous. Enron never
Report thismet a regulation they didn’t like, as their whole
business was based on exploiting regulations to their
profit.