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Back in 2010, we reported on the merger between Comcast and NBC, which was in the works at the time. One of the issues that came up was how programming is chosen.
At the time, the Tennis Channel had filed a suit against Comcast, alleging that Comcast did not make Tennis Channel programming available to as many subscribers as the Golf Channel and NBC Sports (both belong to Comcast). Comcast, under the Communications Act and Commission rules, is required to place channels owned by others on tiers equal to its own similar types of channels and can't play favorites.
The FCC had reviewed the case at various levels for two years (there was an appeal) and finally, in July of this year, issued a decision in favor of the Tennis Channel. The Tennis Channel alleged discrimination, Comcast argued the Tennis Channel was using the FCC to get out of a contract it wanted to escape. According to a Meg James LA Times article:
The FCC ordered Comcast to provide the Tennis Channel with distribution comparable to the two sports channels, which would effectively increase its coverage by about 18 million homes, and force Comcast to pay Tennis Channel millions of dollars more each year in programming fees.
It was the first time that a major cable operator has been found in violation of federal anti-discrimination program carriage rules that were established in 1993.
Comcast was ordered to remedy the situation within 45 days, a window that would make the Tennis Channel available in more homes during one of the biggest tennis events of the year, the U.S. Open in New York. The channel is currently available in about 34 million homes nationally.
Comcast immediately asked for a stay from the remedy, appealing to the U.S. Court of Appeals for the D.C. Circuit. Comcast was granted the stay while the case is argued on appeal. Once again, Comcast's army of lawyers are strategically using the court as a way to slow down an adversary's remedy.
The Department of Justice released a statement on August 16th, that it will allow the controversial Verizon/SpectrumCo deal to move forward with changes. We have watched this deal, bringing you you detailed review and analysis by experts along with opinions from those affected. One week later, the slightly altered deal was also blessed by the FCC.
Many telecommunications policy and economic experts opposed the deal on the basis that it will further erode the already feeble competition in the market. In addition to a swap of spectrum between Verizon and T-Mobile, the agreement consists of side marketing arrangements wherein Verizon agrees not to impinge in the market now filled with SpectrumCo (Comcast, Time Warner Cable, Cox, and Bright House Communications).
Verizon has been accused of hoarding spectrum it doesn't need. The marketing arrangements constitute anti-competitive tools that the DOJ has decided need some adjusting. From the announcement:
In December, 2010, Verizon Wireless began operating its network via C-Block spectrum with licenses it acquired in the 2008 auction. In keeping with net neutrality rules unique to C-Block usage, Verizon agreed long ago that it would not block or limit consumers' ability to tether on their 4G LTE network.
Tethering allows a consumer to use a device, such as a smartphone, as a modem to funnel Internet access to an additional device. On July 31, the FCC agreed to end an investigation into whether or not Verizon Wireless had violated this rule. In exchange, Verizon Wireless would make a $1.25 million "voluntary contribution." Verizon Wireless did not admit it broke the rules. The FCC's consent decree requires the practice cease and that Verizon Wireless implement policies to curtail the behavior.
The story began in 2011. Verizon Wireless began charging its customers an addition $20 per month to allow them to tether additional devices to their smartphones and called the feature "Mobile Broadband Connect."
The Free Press filed a complaint. The FCC began their investigation in October, 2011. From the Free Press website:
Free Press argued that by preventing customers from downloading these applications that allow customers to use their phones as mobile hotspots, Verizon violated conditions of its 700 MHz C Block licenses, the spectrum in which Verizon operates its LTE service. When Verizon purchased the licenses, it agreed to abide by conditions that it not “deny, limit or restrict” its customers’ ability to use the applications or devices of their choosing.
The company also asked the Google Play Store store to block Verizon Wireless customers from accessing software that would enable tethering. Google complied with the request, even though it has often advocated for net neutrality, but were not investigated because they are not an ISP.
In 2010, the Institute for Policy Integrity at the New York University School of Law released a report titled Free to Invest: The Economic Benefits of Preserving Net Neutrality. The report, authored by Inimai Chettiar and J. Scott Holladay, is a great resource - substantial and very digestible - on what net neutrality really is, how it is (or is not) regulated, and the economic possibilities policy makers must consider when moving ahead.
The Institute looks at the economic relationships between content providers, ISPs, and consumers. In addition to the current economic structure, the report examines possible alternate pricing models that are contrary to our current net neutrality policies. We have extracted just a few excerpts and encourage you to get the full report.
There are five main findings that are examined in depth:
Internet Market Failure: The report explains how ISPs lose potential dollars under today's market structure. There is ample motivation for them to find a way to charge content providers based on delivery, and open up a whole new market far beyond our net neutrality policy.
The FCC’s nondiscrimination rule would prohibit an ISP from treating any content, application, or service in a “discriminatory” manner, subject to reasonable network management. This clearly bans pure price discrimination (charging different content providers different prices to access their subscribers). The regulation also bans ISPs from offering content providers a “take it or leave it” offer on access to their users. For example, an ISP like Verizon could not charge a website of a company like The New York Times a certain price for access to its subscribers by threatening to block the website from its network and therefore from its Internet subscribers.
Smart Policy Can Help: The authors of the report stress how the Internet must be viewed as a two pronged market - infrastructure to deliver the content and the content itself - and how both are equally important. Effective policy must recognize the delicacy of that balance.
If you are a current or potential Verizon customer, by now you know that you no longer have the option to order stand alone DSL. When the business decision became public knowledge in April, DSL Reports.com looked into the apparent step backward and found existing customers were grandfathered in but:
However, if you disconnect and reconnect, or move to a new address -- you'll have to add voice service. Users are also being told that if they make any changes to their existing DSL service (increase/decrease speed) they'll also be forced to add local phone service. One customer was actually told that he needed to call every six months just to ensure they didn't change his plan and auto-enroll him in voice service.
By alienating customers from DSL, Verizon can begin shifting more customers to its LTE service, which is more expensive. Susie Madrak, from Crooks and Liars, speculated on possible repercussions for rural America:
Rural areas could see the biggest impact from the shift, as Verizon pulls DSL and instead sells those users LTE services with at a high price point ($15 per gigabyte overages). Verizon then hopes to sell those users cap-gobbling video services via their upcoming Redbox streaming video joint venture. Expect there to be plenty of gaps where rural users suddenly lose landline and DSL connectivity but can't get LTE. With Verizon and AT&T having killed off regulatory oversight in most states -- you can expect nothing to be done about it, despite both companies having been given billions in subsidies over the years to get those users online.
The belief is that current DSL customers who don't want (or can't afford) the switch to the LTE service will move to Verizon's cable competition. Normally, losing customers to the competition is to be avoided, but when your new marketing partners ARE the competition, it's no big deal.
Google's fiber rollout in Kansas City prompted kudos, specualtion, wonder, and analysis. While Google has the ability to invest in such an expensive and huge undertaking. Municipal networks have been bringing next-generation broadband to the public for years.
Local communities all over the country know first hand the economic benefits and improved quality of life that come with publicly owned networks.
In his official statement on the Google rollout, FCC Chairman Julius Genachowski acknolwdged the value of community networks to America and its Broadband Plan. The official announcement:
For the United States to remain globally competitive, we need to keep pushing the boundaries of broadband capabilities and foster testbeds of broadband innovation. Abundance in broadband speeds and capacity – moving from megabits to gigabits – will unleash breakthrough innovations in healthcare, education, business services, and more.
Today’s announcement by Google, the Gig.U projects across the country, and similar continued advances by providers and municipalities are important and welcome developments that are pushing frontiers in speed and bandwidth, while also enhancing consumer choice. As outlined in the National Broadband Plan, it’s vital both that we connect every corner in America to broadband and that we spur next-generation innovation through next-generation broadband networks. (Emphasis added by us.)
SamKnows has been awarded a ground breaking contract by the Federal Communications Commission (FCC) to begin a new project researching and collecting data on American fixed-line broadband speeds delivered by Internet Service Providers (ISP's) - until now, something that has never been undertaken in the USA. The project will see SamKnows recruit a team of Broadband Community members who will, by adding a small 'White Box'’ to their home internet set up, automatically monitor their own connection speeds throughout the period of the project.Unfortunately, SamKnows appears to be documenting fantasy, not reality. To explain, let's start with a question Steve Gibson recently answered on his amazing netcast, Security Now (available via the TWiT network). A listener asked why he gets such large variation in repeated visits to Speedtest.net. Steve answers the question as an engineer with a technical explanation involving the TCP/IP protocol and dropped packets. But he missed the much larger issue. Packets are dropped because the "pipes" are massively oversubscribed at various places within the network (from the wires outside you house to those closer to the central office or head end). What this means is that the cable company (and DSL company, to a lesser extent) takes 100Mbps of capacity and sells hundreds of people 20Mbps or 30 Mbps or whatever. Hence the "up to" hedge in their advertisements. The actual capacity you have available to you depends on what your neighbors (cable) or others in the network (DSL) are doing. Dropped packets in TCP result often result from the congestion of high oversubscription ratios. This gets us into why Speedtest.net and Sam Knows deliver fantasy numbers.
If you live in Boston, Baltimore, Albany, Syracuse, or Buffalo, you won't be getting FiOS from Verizon. Absent any public investment, you will likely be stuck with DSL and cable... like 80% of the rest of us.
Not long after Verizon announced it would cease expanding FiOS, we learned that Verizon was coming to an arrangement with the cable companies that would essentially divide the broadband market. Verizon won't challenge cable companies with FiOS and the cable companies won't challenge Verizon's "Rule the Air" wireless domain.
For a while now, the FCC has reviewed a potential deal for a Verizon purchase of Comcast's wireless spectrum. The possible deal involves multi-layered questions of anti-competitive behavior, collusion, and corporate responsibility.
Along with many other interested parties, such as the Communications Workers of America, Free Press, Public Knowledge, and the five towns are publicly opposing the deal. They have expressed their derision to the FCC but whether or not they will influence the result remains to be seen.
Curt Anderson, chair of the Baltimore City Delegation to the Maryland House of Delegates, expressed...outrage on the agreement the telco made.
"Under this transaction, Baltimore will never get a fiber-optic network, and the city will be at a disadvantage," he said. "The direct job loss will be the hundreds of technicians that would be employed building, installing and maintaining FiOS in the area. The indirect costs of this deal are even higher: the lack of competition in telecommunications will raise prices and reduce service quality.
The deal, said Albany Common Council President Carolyn McLaughlin, "is not in the best interest of those who need to get and stay connected the most and is "a step backwards in bridging the digital divide."
Free Press caught and isolated an excellent question from Senator Frank Lautenberg (D-NJ) to FCC Chairman Genachowski during recent hearings. The Senator notes that many Americans do not have sufficient access to broadband but 19 states have enacted barriers to make it harder for communities to build their own.
FCC Chairman said he thinks innovative municipal solutions should be encouraged and that he looks forward to working with the Committee to address the obstacles.