Why emerging markets need smart internet policies

The Alliance for Affordable Internet (A4AI) has released its latest study into, well, the affordability of internet access. The study shows how big the challenge is on that front in emerging markets – for over two billion people there, fixed-line broadband costs on average 40 percent of their monthly income, and mobile broadband costs on average 10 percent of their monthly income.

The United Nations’ “affordability target” for internet access is five percent of monthly income, so there’s clearly a ways to go in many developing countries. Almost 60 percent of global households are still unconnected and, unsurprisingly, those who can’t afford to get online tend to be poor, in rural communities and/or women. As my colleague Biz Carson wrote the other day, women are being left behind in the related smartphone adoption stakes too.

A4AI comprises players from [company]Google[/company] and the World Wide Web Foundation to the international development departments of the U.S. and U.K., and its report — unveiled Wednesday at Mobile World Congress in Barcelona — takes into account drivers of connectivity such as electrification and policy. As A4AI executive director Sonia Jorge pointed out quite reasonably in a statement, those who are unable to afford internet access are quite often those who most need it to improve their lot.

Still, she noted, good national “policies and principles” can make a big difference. For example, the A4AI report praised Latin American countries such as Costa Rica, Colombia and Peru for having solid infrastructure rollout plans. Costa Rica, which topped the affordability rankings of 51 emerging and developing economies, has been working to provide universal access since 2009.

According to A4AI, the policy areas that need attention include national broadband plans, competition-friendly environments (remember, many of these countries still have powerful telecoms monopolies), good spectrum allocation policy, the promotion of infrastructure-sharing, and “widespread public access through libraries, schools, and other community venues.” Strong political leadership helps, they added.

This is very much a long-term game. In the meantime, we have initiatives such as Google’s Loon, which is not quite ready yet, and [company]Facebook[/company]’s Internet.org, which is out there but somewhat divisive, both in terms of its impact on carriers and its threat to net neutrality. Both come with a still-fuzzy commercial imperative; from a societal standpoint, it is surely healthier for governments in emerging markets to foster more neutral and competitive alternatives.

White space broadband, which Google and [company]Microsoft[/company] have both been championing, could provide part of the solution (particularly in rural areas), but again it’s being held back by sluggish policy-making. Very few countries have authorized its use thus far, due to concerns over its impact on the broadcasting industry – the technology uses the spectral gaps between TV stations, though it’s now proven that it can avoid interference – and perhaps its threat to telecoms monopolies as well. Again, smarter government can make all the difference.

MWC-2015-ticker

FCC official says Google, Facebook had little say on net neutrality

The FCC’s landmark decision on net neutrality has produced all sorts of speculation about the degree to which well-known tech giants shaped the outcome.

Gawker, for instance, claimed that Americans can thank a benevolent Facebook-Google cabal for the open internet rules that were passed last Thursday. The Wall Street Journal, on the other hand, has suggested instead that Google has been conspiring behind the scenes to weaken the rules. So what’s the real story?

“The fact of the matter is that Google and Facebook sat this one out … I don’t what this person is smoking” said FCC lawyer Gigi Sohn in reference to the Gawker story.

Sohn was speaking Tuesday at a Freedom to Connect event in New York City, where journalist Sam Gustin of Vice asked her about the ruling and what comes next. The 3-2 ruling, which reclassified ISP’s as common carriers, came as a surprise to many given that FCC Chairman Tom Wheeler was once skeptical to the measure and because of fierce opposition from the telecom industry.

According to Sohn, Wheeler’s ultimate decision did not come about as a result of pressure from corporations or the White House. Instead, she said Wheeler (who is not a lawyer) came to reassess the situation after learning about various legal nuances, and in response to a series of external developments, including a time last spring when his Netflix service started sputtering.

Sohn did, however, credit the White House and members of Capitol Hill for providing “covering fire” as it became clear that Wheeler’s office intended to go forward with reclassification. She added that the FCC’s final decision did not come about as a result of any single factor (including comedian John Oliver), but rather from broad public support.

As for corporate influence, Sohn appeared on Tuesday to chastise the tech industry for not lending more public support to net neutrality, though she did credit Google for providing a small boost late in the process.

“Google to its credit said Title II [the reclassification law] wouldn’t hurt its investment in Fiber… Facebook has said nothing,” Sohn said.

Ultimately, the guessing game over the tech industry’s role in the net neutrality debate may remain just that — a guess. While it seems probable that an 11th hour call by Google persuaded Wheeler to back away from a two-step reclassification for interconnection (the so-called “middle-mile” where ISP’s and websites connect), for now there’s little to support any grander theories.

In the meantime, there will be plenty more for internet policy types to chew on while they wait for the official copy of the final decision to emerge in the next week or two.

Sohn predicted that “people will try to grind the FCC to a standstill” through budget threats and partisan hearings in the coming months. She added, though, that the issue may become less partisan since many groups who ordinarily support Republicans, who are the main antagonists of the new rules, are in favor of net neutrality.

Finally, as Sohn spoke, her boss Chairman Wheeler was wrapping up an appearance at the World Mobile Conference in Barcelona, where he told the audience that phone carriers’ massive recent spectrum purchases belied the idea that the new rules would dissuade companies from investing in the internet.

5 reasons the FCC might be wrong about net neutrality

This week the FCC passed new rules on net neutrality, which were essentially designed to limit the ability of internet service providers (ISP) to either slow down or boost the speeds of websites. While many experts praised the ruling, not everyone was thrilled by the outcome.

On this week’s Structure Show podcast, Mark Cuban — the billionaire businessman who made his name in tech and now owns the Dallas Mavericks and is featured on the television show Shark Tank — came on to opine on net neutrality and why he thinks the new rules are bad for the internet and bad for competition. What follows are a couple takeaways on why Cuban believes net neutrality will do more harm than good.

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1. The internet is working fine the way it is

“Look, I’ve had my same position on net neutrality for more than ten years and that is I think what is happening on the net works. I mean, I was involved in the internet right when it started. We started Audionet, which turned into Broadcast.com back in 1995 and for the past 20 years things have worked. And now the net neutrality folks seem to be getting some momentum creating the perception that the big ISPs that got us to this point have now become bad citizens and they are going to ruin the internet unless they’re regulated. And from my perspective, I like the way technology goes and I like the competition and I like the way things are going. I think introducing regulations via the FCC is a huge mistake and I said so.”

2. Government bureaucracy is worse than ISP dominance

“Comcast has always had that power, right? It’s not like [company]AT&T[/company] and [company]Comcast[/company] had just recently become super big companies and they’ve changed their actions. I mean, one of the tenets of net neutrality is that no website, no legal website, should ever be discriminated against. Name me one that has been.”

3. Don’t worry about broadband providers. Worry about Google and Apple

“If you’re going to talk about concerns, what’s the fastest growing access methodology for the internet? It’s mobile, right? And who controls access to mobile? [company]Google[/company] and [company]Apple[/company]. So the far greater risk, and I still don’t think it requires legislation, but the far greater risk is OK…if Apple decides that Comcast’s app is not right, Comcast is not going to be able to reach most of their market to get access through an app to their own broadband, which is crazy when you think about it but it’s a possibility.”

4. Net neutrality laws could end up like patent laws

“For all the years that we’ve been in the tech industry since we’ve been about 8 or 9 years old, the majority of tech companies did not get involved in DC. They did not get involved in regulation. This is all a recent phenomenon. And now, everybody’s got a lobbyist, everybody’s involved, everybody’s got their opinion and I think it backfired on us, just like patent laws backfired on us. Look what happened with patents. That’s what happens when…legislation gets involved with technology. And so I just think that if you’re looking for pain points that the broadband ISPs aren’t it.”

5. Remember Janet Jackson’s infamous wardrobe malfunction? That’s the FCC for you

“What if there’s some decision that just shocks everybody … It’s happened time and time again where FCC regulations get tested, the decision goes against the FCC and they fight it for years. Just like the wardrobe malfunction from the Super Bowl in 2004, they spent money for 8 years. The FCC that you want to be the department of the internet is the company that spent taxpayer money trying to cover, debating, arguing the penalty of showing Janet Jackson’s nipple … Now those people who want to protect decency in the United States and the content that’s delivered over the internet is the purview of the FCC, where else would you go?”

Net neutrality’s next chapter: How experts saw today’s milestone and next steps

Pardon me while I catch my breath after all the celebratory dancing I’ve been doing in the wake of the FCC’s historic vote to reclassify broadband under Title II of the Communications Act in order to preserve true network neutrality. We’ve explained what this means for the average consumer here, and why the whole thing was so improbable in this story. But really, today is like the end of a romantic comedy that actually started out all semi-tragic like a Wes Anderson movie and then became something light and fluffy starring Drew Barrymore and restored your faith in humanity.

So yes, I’m thrilled and having written probably a million words on the topic in the last eight years, I could do a victory lap a mile long, but I’d rather share some of the awesome stuff that other people on the web are writing. Because this time, in addition to the 4 million people who commented before the FCC, many thoughtful legal scholars, rarely heard from tech leaders and others have added their voices to the discussion on the FCC’s historic vote today.

So outside of Verizon’s 1930s-era Morse code commenting on the news, or the industry’s whining (which we’ll see parroted in every article), I’ll focus on some very thoughtful points that we should be thinking about as these rules are finally shared and then inevitably head to court.

FCCHQ

Let’s start with Stanford legal scholar Barbara van Schewick, who had written an excellent analysis about the upcoming rules. (You should seriously go read it.) She is optimistic about the chances that the FCC will prevail in court once one of the ISPs or affiliated organizations such as the National Telecommunications and Cable Association decides to sue. From her blog:

[blockquote person=”” attribution=””]The good news is that the FCC’s rules will likely be upheld in court. The agency’s decision to reclassify Internet service as a common carrier under Title II of the Communications Act puts the rules on a solid legal foundation. By coupling reclassification with forbearance, the FCC has adopted a light regulatory touch that preserves Internet service providers’ incentives to invest.
[/blockquote]

Tim Wu
And while Tim Wu, the man who coined the term network neutrality, is hardly an unheard voice in the debate, he hits on an important point that event the Wall Street Journal seems to have missed in its reporting on this issue; that investors seem to feel like this ruling is fine for the broadband providers whose stocks went up or remains pretty much the same. Wu wrote in the New Yorker this afternoon:

[blockquote person=”” attribution=””]Yet the moment that Tom Wheeler announced his plans for strong net-neutrality rules, on February 4th, broadband stocks jumped, and they have stayed buoyant. This has confused experts. Craig Moffett, whom I consider to be the smartest telecom analyst around, was forced to blame the market. “I think it just shows you that the market doesn’t really understand these issues,” he said.

The theory of the wisdom of crowds suggests that the markets have noticed something: the broadband industry hates net neutrality, but its existence has always had a huge and unnoticed upside. Selling broadband is a great business: Moffet has pointed out that the margins are north of ninety-seven per cent. Stated simply, a strong net-neutrality rule locks in the status quo for the most profitable part of the cable industry’s business.[/blockquote]

As for the effects of these rules on new business models, including things like zero-rating of applications and other services that ISPs might want to implement that might generate questions for carriers or consumers about their “neutrality,” Fierce Wireless’ Phil Goldstein explains a little bit more about the process that carriers and consumers can go through to get an FCC opinion under the General Conduct Rule.

[blockquote person=”” attribution=””]FCC officials made clear that carriers will not need approval from the agency to launch new business models and service offerings like sponsored data or zero-rated data. But the officials said carriers may ask for the FCC’s opinion on whether the plans meet the future conduct standard. Wheeler and other FCC officials also described some of the criteria they will use in determining the standard, which will include an offering’s effect on competition, innovation, consumer protections and user control. The full list of criteria will not be known until the FCC publishes the rules.
[/blockquote]

Sonic CEO Dane Jasper on Feb. 26 in front of the FCC.

Sonic CEO Dane Jasper on Feb. 26 in front of the FCC.


And lest you think that all ISPs oppose this, there are those that welcome the news, even if there are concerns about certain aspects of the regulations, especially as they relate to utility pole access and other minutiae we may not understand fully for quite some time. Still, Dane Jasper, CEO of regional ISP Sonic, wrote on his company’s blog:

[blockquote person=”” attribution=””]It is important to draw the distinction between regulation of the Internet, and regulation of carriers. The FCC’s order will disallow carriers from discriminating against sources of traffic that their customers choose to access via the Internet. This is common carriage at its core, and as a carrier, I am supportive of being regulated as a common carrier by the FCC.
[/blockquote]

Finally, if you’re wondering how far the FCC could have gone, beyond the dreaded rate regulation that the cable industry so feared, Jon Brodkin over at Ars Technica brings it up. The agency could have demanded that the ISPs unbundle their services (something that would have never happened given our country’s regard for private investment). That would have been far more disruptive than the FCC’s actions on municipal broadband today or its vote to regulate broadband as a transport service under Title II. From his story:

[blockquote person=”” attribution=””]The FCC could have tried to use Title II to require last-mile unbundling, in which Internet providers would have to sell wholesale access to their networks. This would allow new competitors to enter local markets without having to build their own infrastructure. But the FCC decided not to impose unbundling. As such, the vote does little to boost Internet service competition in cities or towns. But it’s an attempt to prevent incumbent ISPs from using their market dominance to harm online providers, including those who offer services that compete against the broadband providers’ voice and video services.
[/blockquote]

Amsterdam Internet Exchange broadens its foothold in the US

The Amsterdam Internet Exchange (AMS-IX) is partnering up with Telx to establish a new internet-access point inside Telx’s NYC2 data center, according to an announcement  by the companies. The new point of presence (POP) comes just a few months after AMS-IX opened up another access point in Digital Reality’s San Francisco facility.

AMS-IX’s new POP is another step towards entrenching the European internet exchange model in the U.S. Instead of having internet service providers (ISPs) or data-center operators determine the cost structure of an internet exchange — which are basically the data-center locations where content providers, ISPs, telecoms and others link up and exchange traffic — the European internet exchange model operates a bit more like a commune in which all parties are owners and have equal say.

Advocates of this type of model claim that it hampers the ability for any specific entity, typically a telco, to monopolize the internet exchange and game the system for its advantage.

Netflix has been a big proponent of the European internet exchange model and made a splash in December 2013 when it signed on as AMS-IX’s first customer in New York. As Gigaom’s Jeff John Roberts reported, ISPs like Verizon and Comcast want to charge Netflix and content providers a premium because of the enormous amounts of network traffic they generate.

Neflix and others claim that these broadband providers have retaliated by not upgrading key internet ports, which resulted in bad network service for Netflix and other content providers.

With the new POP in Telx’s NYC2 data center, AMS-IX and Telx said that customers will now have more peering opportunities with organizations not only housed in the NYC2 data center, but also members of the Telx’s NYC1 and NYC3 data centers, which make up “The NYC Trifecta” in Manhattan, the release states.

The announcement also coincides with FCC Chairman Tom Wheeler explaining in a Wired op-ed his case for settling the argument over net neutrality and which Gigaom’s Stacey Higginbotham dissected. Wheeler did not share the specifics of his plan in the Wired piece, but expect to see them emerge soon.

Competition could cost US ISPs $24B a year, says report

With rumors of Verizon seeking to sell a significant chunk of its wireline assets and as the government continues its review of Comcast’s attempt to take over Time Warner Cable, which could lead to further consolidation in the broadband market, a new report out from a U.K. research firm has some shocking news for U.S. ISPs. Point Topic, which gathers worldwide data on broadband prices, said that if the U.S. market were truly competitive, its ISPs would lose $2 billion in revenue a month. Currently, U.S. customers spend $5.27 billion a month based on Point Topic’s report.

The report is mostly a thought exercise instead of a reaction to a definitive policy change, but it does make a compelling argument that U.S. consumers pay the price for the current broadband duopoly we have in most markets. It also noted that the U.S. is no longer the largest broadband market — that distinction now belongs to China, which is what the analyst is comparing the U.S. market against.

The report makes the assumption that this competition would come in the form of the government forcing ISPs to open up their networks by making them sell access to their pipes for a regulated price, as well as from competing municipal broadband networks. Open broadband networks exist in other parts of the world such as as in the Netherlands, where Amsterdam’s fiber network is open to any provider, or in the U.K, where the government forced open the networks and set some pricing.

Point Topic acknowledges that no one in the U.S. is discussing forcing open networks at the moment. Even Google, which had talked about opening up its network at the beginning of its fiber journey quickly backed off that positioning as it built out its networks. But competition is coming, even if it isn’t as drastic as the regulatory opening up that came in the U.K., which is what Point Topic used to get its numbers.

[blockquote person=”” attribution=””]If we drop the tariffs to $173.76, $43.14 and $8.63 per month which is equivalent to the UK, then we see a drop of over $2 billion a month in subscription revenue. Whether the industry in the US could bear this is questionable but it seems, at the moment, likely that some version of increased competition will drive prices down in the next five years.

Missing out on subscription revenue makes it difficult for the supplier companies. Decreasing revenues are particularly hard to handle when a sector has adjusted to super-normal profits which certainly seems to be the case in the US.[/blockquote]

The thought exercise ends with a pretty damning conclusion — that the lack of competition and subsequent high price for broadband has hindered adoption above and beyond where it should be compared to other wealthy countries where broadband is cheaper.

Elon Musk’s satellite plan: Project Loon without helium or latency

Elon Musk dropped a bomb from near-earth orbit on Friday at an event in Seattle: Instead of working with mini-satellite startup OneWeb to build an internet network in the heavens (as was widely expected) Musk told Bloomberg he plans on creating a globe-spanning constellation of his own, launching hundreds, if not thousands, of interconnected satellites each weighing as much as a Vespa.

This is the kind of bold plan we’ve come to expect from Musk, but unlike his past grand-scale projects, the idea for this one isn’t entirely new. The most obvious example is [company]OneWeb[/company]’s planned constellation of 648 satellites. Formerly know as WorldVu, the company was founded by ex-Google satellite chief Greg Wyler and has backing from [company]Virgin[/company] and [company]Qualcomm[/company].

But there are also already satellite constellations in the sky supplying internet access to any point on Earth, most notably Iridium and Globalstar’s networks, though neither one is offering what you would consider broadband speeds. And if we’re looking to make comparisons to other internet projects out there, we need look no further than [company]Google[/company].

The voyage of Loon balloon I-167 as it circumnavigates the globe (source: Google)

The voyage of Loon balloon I-167 as it circumnavigates the globe (source: Google)

When a balloon looks like a satellite

There are surprising similarities between Project Loon and Musk’s proposed SpaceX network as well as OneWeb. The two projects not only appear to share the goals – to connect the farthest corners of the Earth with low-cost internet – but the basic architectures of the networks would be the same.

Google is building a vast network of balloons that surf the stratospheric winds 12 miles up in loosely defined latitudinal orbits around the world. Those balloons use a radio broadband link to connect to transmitters on the ground and mesh networking techniques to link to the other balloons on the horizon, creating a kind of floating internet in the sky. Data is passed from balloon to balloon until it’s within site of a ground receiver, which offloads that data into the internet proper.

Musk’s plan calls for essentially the same scheme, just 740 miles higher up. The original talk of 700 orbiters has now turned into plans for a a constellation with as many as 4,00o satellites. In low-earth orbit, those satellites would be skimming the top of the Earth’s atmosphere, 30 times closer to the surface (and your PC or smartphone) than the geostationary satellites that today carry the bulk of our orbital internet traffic. They won’t be floating like Loon Balloons, but those satellites are still bound by the laws of physics. At that altitude, they’ll need to travel at 16,000 mph and would complete a full orbit of the Earth in a little less than two hours – otherwise they’d fall out of the sky.

That means from a vantage point on Earth these birds will be whizzing overhead. So as with Loon, an Earth-based transmitter won’t be connecting to a single Musk-built orbiter, but multiple. Both balloon and satellite would pass your connection on to the next balloon or satellite as they pass overhead. Data would then flow from balloon to balloon and from satellite to satellite until they found their appropriate ground-based links.

An Iridium flare

An Iridium flare

If you want to get a more concrete of visual, you need only look to the night sky (with a little help from this website). [company]Iridium[/company]’s network of satellites have highly reflective antennas, which produce “flares” when they reflect the Sun’s light, making them resemble shooting stars.

A new spin on the orbital constellation

As those Iridium flares readily demonstrate, there’s already plenty of hardware in the heavens dedicated to providing global internet access. What will Musk or OneWeb’s constellations do that Iridium or [company]Globstar[/company]’s won’t? Or for that matter what Project Loon or other sky-bound internet projects like Facebook’s drones?

While Iridium and Globalstar may have pioneered the globe-spanning internet constellation, they also have limited number of satellites in the sky (66 for Iridium, 32 for Globalstar). Putting more birds in orbit is the equivalent of adding more towers to an urban cellular network: fewer people are connecting to the same cells so every user can tap faster speeds and there’s more overall capacity throughout the entire system.

An Iridium Next satellite

An Iridium Next satellite

Iridium and Globalstar are also focused on providing mobile internet connectivity from satellite phones and modems to a network far above. That’s very useful for leaving a GPS breadcrumb trail for a lost airplane or maintaining contact with dog sleds racing in the Iditarod, but Musk appears to have more stationary transmitters in mind. A high-power antenna aimed at a satellite can produce a lot higher data speeds than one you carry in your backpack.

And while Globalstar and Iridium may have had cutting edge technology at one point, they leave a lot to be desired today. Iridium’s current network is slower than a dial-up modem, and the new Iridium Next network Iridium is launching into space starting this year – ironically on the back of SpaceX’s Falcon 9 — will support a 15 Mbps to a stationary dish antenna.

It ain’t easy running satellites

It takes a long time to plan, design, build and deploy a satellite network. The birds that Iridium is rolling onto the launch pad this year were designed several years ago, and the network won’t be fully operational until 2017 when the last of 66 orbiters are in place.

Musk will be working with newer technology (The Information has it that SpaceX is weighing using optical lasers instead of radio spectrum), and being Elon Musk, he’ll likely be facing a much shorter development timeline (it helps to have the resources of SpaceX at your disposal). But once he gets those birds in space, he’ll likely face many of the same hurdles as other satellite providers. His technology will be frozen in time. These satellites aren’t exactly easy to fix if they break, and upgrading a satellite usually mean sending to fiery death in the Earth’s atmosphere and replacing it with a new one.

A look at the various satellite orbits. Musk's proposed network would sit in low-earth orbit.

A look at the various satellite orbits. Musk’s proposed network would sit in low-earth orbit.

One of the advantages to Project Loon is that Google’s network will be much more accessible. A Loon balloon will circumnavigate the world three times before coming down for regularly scheduled maintenance. Even [company]Facebook[/company]’s drones can be flown down for repairs and upgrades.

But Musk seems to be counting on his orbital network doing something those atmosphere-hugging projects can’t: create a better, faster internet. I’m not talking about speed here, but latency – the delay data undergoes when traversing the globe. When connecting in San Jose to a server in Sydney, your request is hitting multiple routers before it even arrives at the undersea cable to begin its long journey across the Pacific, and all of those steps introduce latency.

Musk claims he can build a purer, simpler internet in the heavens. Though any traffic would have to got through the Earth’s atmosphere twice, once that data stream is 750 miles up, it would make only a few satellite hops across a near vacuum, through which electromagnetic waves travel much faster than through a fiber optic cable. So what Musk is promising to do is not only build an internet to connect the furthest corners of the planet, but a create a network that would draw those far corners much closer together.

There’s enough of a difference between Loon and Musk’s plan, that Google may view them as complimentary technologies, and according to the Information’s report, Google is considering investing in the SpaceX project.

This post was updated on Jan. 21 to note that the size of SpaceX’s planned constellation has grown from 700 to 4000 satellites.

Want to see broadband’s future? Check out the airline industry

A New Yorker explainer on why the airlines want to make you suffer has been making the social media rounds. It’s an excellent case study in how the airlines have created a miserable experience for passengers so they can build a profitable business based on charging fees for bags, early boarding and better seats. It’s also just like the playbook big broadband companies are using as they make efforts to charge both consumers and the content companies for access to their pipes.

The parallels between the airlines and the goals and arguments of the broadband industry are too similar. For example, from the New Yorker piece we have this section:

[blockquote person=”” attribution=””]The airlines, and some economists, argue that the rise of the fee model is good for travellers. You only pay for what you want, and you can therefore save money if you, for instance, don’t mind sitting in middle seats in the back, waiting in line to board, or bringing your own food. That’s why American Airlines calls its fees program “Your Choice” and suggests that it makes the “travel experience even more convenient, cost-effective, flexible and personalized.”[/blockquote]

Meanwhile, if we go to the arguments made by AT&T back in 2011 when it first capped its DSL broadband service at 150 GB per month, you’ll see a similar argument of people paying for what they use in this article from CNN:

[blockquote person=”” attribution=””]”Our approach is based on customers’ feedback,” said Mark Siegel, spokesman for AT&T. “They told us that the people who use the most should pay more, and they also told us we should make it easy for them to track their usage. We think our approach addresses these concerns.”
[/blockquote]

But as we have argued fairly consistently the danger is that when you start creating these sorts of incentives you also create a reason for the airline or the broadband provider to create a crappy experience so people pay to avoid it. Which is what the New Yorker points out and argues has happened in the airline industry:

[blockquote person=”” attribution=””]The necessity of degrading basic service provides a partial explanation for the fact that, in the past decade, the major airlines have done what they can to make flying basic economy, particularly on longer flights, an intolerable experience. … Bill McGee, a contributing editor to Consumer Reports who worked in the airline industry for many years, studied seat sizes and summarized his findings this way: “The roomiest economy seats you can book on the nation’s four largest airlines are narrower than the tightest economy seats offered in the 1990s.”
[/blockquote]

The New Yorker noted that this behavior on the part of the airlines has led to a combined $31.5 billion in income from fees and ancillary payments, which is the fastest-growing source of income for primary airlines. A source of income that the article points out has grown by 1200 percent since 2007.

While the typical consumer might read this and experience rage, I read this and experienced a moment of hope. This article is a gift to anyone concerned about the potential merger between Comcast and Time Warner Cable — a merger that would decrease broadband competition and also eliminate the last big broadband provider that hasn’t implemented usage based broadband caps that essentially take us down the airline’s road of paying for a better broadband experience.

It is a likewise a gift to people concerned about the Open Internet rules that the Federal Communications Commission is considering — the so-called network neutrality rules — that could lead to content providers having to pay for faster access to the end consumer.

Under such deals, a concern is that sites that don’t pay get left behind and are less able to compete against larger sites who can afford to pay up for faster access, which is the equivalent of the poor traveler who is stuck checking a bag at the gate while all the passengers who booked economy plus seats board before her toting their luggage and take up the overhead bins.

Don’t want to check that bag or sit squished in the middle with nary a bag of peanuts on that four-hour flight? Pay up and just be grateful you get anywhere at all. Don’t want to suffer through 150 GB data caps, pay up for more and hope that whatever site you want to visit does the same to make sure its bits reach you at a decent rate. And yeah, just be grateful that you get to experience the convenience of streaming as opposed to driving to the Blockbuster Video to rent a movie on disc.

So read that article and rage about the airlines, and then turn that rage into something useful by using it to stop the same thing from happening to your broadband internet. Tell your Congressman how you feel about the Comcast and TWC merger and network neutrality.

It’s showtime in fight against state barriers to public broadband

One of the obstacles to more communities getting faster, better broadband is the collection of 20 states with legal restrictions on public-owned broadband networks. In 2015, we should expect to see many of these restrictions aggressively challenged because, frankly, communities are mad and aren’t going to take these impediments to local economic growth any longer.

“Google Fiber, in particular, has inspired some cities to go all in to find a way to get super-fast broadband to their constituents,” Kent Wyatt, founder of Emerging Local Government Leaders, said. “Most local officials, though, haven’t had an opportunity to inform citizens of all their options for broadband and asking voters what they want to do. So why are state legislatures limiting our options preemptively?”

Two organizations have formed to organize and focus efforts by public, private and nonprofit sector stakeholders to find paths to greater broadband coverage. The Coalition for Local Internet Choice (CLIC) unites public and private interests that support local choice and provide communities practical advice and tools to prevent new state barriers from being enacted and remove existing barriers. Next Century Cities is a membership organization providing knowledge and peer support for communities and their elected leaders, including mayors and other officials, as they seek to ensure that all have access to fast, affordable, and reliable internet.

For these groups and other communities to successfully push back on these state laws, everyone needs a good understanding of the various laws and the nature of their restrictions.

Breakdown of public network laws

The 20 state laws restricting public-owned networks can be divided into three categories: the “if-then” laws, the “minefield” laws and the “total ban” laws. Each category presents communities with a different degree of difficulty in pursuing broadband deployments.

“If-then” laws

The “if-then” laws are fairly straightforward: if you meet requirement X, then your community can build a network. A couple of laws, such as the one in the state of Washington, are pretty simple. Several states such as Iowa and Colorado require communities hold a referendum: if a city gets a certain percentage of the vote, then it can build a network. Pennsylvania communities need to present their broadband wishes to the incumbent for the area. If the incumbent won’t build it, then the community can move forward.

The biggest barrier in the “if-then” states, though, appears to be one of perception. Compared to other states’ laws, “the law in Pennsylvania is one that’s straightforward to work through,” said Beth McConnell, policy director at the Philadelphia Association of Community Development Corporations. “Unfortunately, many communities honestly believe that the state has a complete prohibition of any kind of public-owned networks.” One county here (Cambria) navigated the waters and built a network. But despite its success, only two Pennsylvania communities appear to be interested in following its lead.

Several years ago, many communities feared a referendum as a near-impossible mountain to climb because the incumbents could crush them in an electoral battle. However, first Longmont, Colorado, and then 10 more cities in the state plus a couple in Iowa, passed ballot measures in the last two years, creating a roadmap for winning referenda.

Meeting the requirements of many of the If-Then Laws actually contributes to the success of a community broadband network.

“Minefield” laws

These state laws were written with the primary intent of prohibiting public-owned networks, but without coming right out and stating it. They create multiple layers of rules that are so onerous as to make compliance a significant financial burden, or they are worded so vaguely that they become minefields in which one wrong step could trigger incumbents to take legal action. North Carolina and Louisiana are two states with this type of law. Wilson, North Carolina is one of two cities petitioning the FCC to have its state laws rescinded.

Small and rural communities in these states are particularly disadvantaged because they don’t have the legal resources and experience to go battle giant incumbents’ legal teams. Mid-size cities such as Lafayette have greater resources and overcame their legal challenges. But most would prefer to avoid the addition to costs and time delays while legal battle rage toward uncertain conclusions.

In general, these laws have so many levels of restrictions and requirements that the best (though not only) ways for cities to move forward is to get legislators to reverse all or parts of the laws, or for the FCC to use its authority to rescind the laws.

“Total ban” laws

These laws typically are short and unambiguous — public entities are prohibited from providing services, or they can provide services to a limited audience and only on a wholesale basis. However, there may be a loophole in a couple of states that can be exploited.

It may surprise a lot of people that Texas is not part of the list at all, particularly since it has a law that says public entities cannot own or operate telecommunications services. However, Texas telecom attorney Clarence West pointed out in a filing with the FCC that “Texas cities are not prohibited from providing Internet connectivity, as it is a federally classified as an ‘information service, not a ‘telecommunications service.’ There are Texas cities that have provided internet connectivity on a city-wide basis and Greenville, Texas currently provides both cable and Internet access service.”

This brings up an interesting discussion point. Why don’t public entities just do as Texas does and ignore those statues that only prohibit or restrict telecommunication services? For now, let it suffice to say that this battle has to play out in each state on its own. The complexity of these laws must be studied in depth, and the politics of each state is a big factor on how to approach these laws.

In my next post, I’ll explore some potential ways forward in addressing these restrictions.

This is a list of which states fall in which category.

If-then laws Minefield laws Total bans
Alabama Florida Arkansas
California Louisiana Missouri
Colorado North Carolina Nebraska
Iowa South Carolina Tennessee
Michigan Utah Virginia
Minnesota
Nevada
Pennsylvania
Washington
Wisconsin

Regulating peering

One of the most puzzling aspects of the peering disputes that have arisen — principally between Netflix and a handful of the largest ISPs — is how little money appears to be involved.