http://www.tompaine.com/articles/2006/06/21/net_neutrality_diversion.php

Net Neutrality Diversion

Art Brodsky

June 21, 2006

Art Brodsky is communications director for  Public Knowledge, a 
public interest group working at the intersection of information and 
technology policy.

A couple of days ago in an auditorium at George Washington University 
here in Washington, former Clinton administration spokesman Mike 
McCurry trotted out the hottest talking point in the fight against 
keeping the Internet open. He accused the pro-openness forces of 
hypocrisy because search engines play favorites.

What Google does, he said, "looks suspiciously to me like exactly the 
sort of content-discrimination business model that advocates of the 
network neutrality are foisting off on the telecoms. What is the 
difference?"

As a logical argument, the issue is just silly. As a diversionary 
tactic, it is more valuable. For while this is being argued out, the 
telecom, cable, movie and recording industries are getting away with 
one big goodie bag.

Google, of course, is a staunch advocate for a fair and open 
Internet. In his answer to what looked like a planted question during 
a debate with Amazon's Paul Misener, McCurry kept in play a great 
diversionary tactic that surfaced in April during the House Energy 
and Commerce Committee consideration of telecommunications 
legislation. Then, Rep. Charlie Gonzalez, D-Texas, who represents 
AT&T's hometown of San Antonio, proposed an amendment that would have 
required the Federal Communications Commission to study "preferential 
practices of the top five Internet search engines by usage and the 
top five electronic sites by revenue."

The amendment was defeated, but the issue has been kept alive as the 
telephone and cable companies never miss a chance to make Google and 
other e-commerce companies defend their businesses. Search engine 
neutrality now comes up in conversations with Hill staff and 
legislators, requiring Google and others to get away from the main 
debate to point out that there are many search engines but only at 
most two broadband providers, that users willingly Google, and that 
many customers have little choice in how to get onto the Internet.

However, just as the Google non-issue is a diversion from the core of 
net neutrality, so the net neutrality debate is in a sense a 
diversion from other major flaws in the telecom bill.

The debate over net neutrality is certainly important, because it 
will in large part determine whether the free and open Internet will 
continue to exist as we have known it for the past 15 years or so. 
But by focusing all of the attention on the issue, many other 
important features of the telecom legislation the Senate Commerce 
Committee is scheduled to mark up June 22 will be completely ignored.

There is no meaningful net neutrality language in either the House 
bill or the current version of the Senate bill, so the telephone and 
cable companies come out ahead on that score.

But the main purpose of the bills was to create competition in the 
cable business by allowing telephone companies to get into that 
business more quickly. In theory, prices would be lowered for 
consumers if the telephone companies didn't have to obtain permission 
from 33,000 local areas that award franchises to cable systems to 
offer video services. And so the "national franchise" was born, in 
which all the telephone company has to do is fill out a form at 
either the FCC (House bill) or a local agency (Senate) and, voila, 
enter the business. No muss, no fuss, no negotiations that bogged 
down cable companies for years when they were starting out. Cable 
companies get the same deal when their franchises expire.

There is, of course, one little detail. The newly entered telephone 
companies are under no requirement to build out their systems to all 
the parts of a local area. 

Unlike the House bill, some states require the new telephone 
companies-as-cable-operators to build out their systems over an 
ever-increasing percentage of a state.  That type of requirement 
makes certain that eventually all parts of an area will have access 
to the new services and, presumably, the price competition that comes 
along with it.  The practice of providing service in some areas and 
not in others is called "redlining," a term that first came from the 
practice of financial institutions literally drawing a red line on 
the map around some neighborhoods in which they didn't want to do 
business.

The House panel rejected the approach of setting build-out 
requirements.  Instead of having an affirmative requirement to serve 
everyone, the bill instead said a video service provider may not deny 
access to its video service to any group of potential residential 
video service subscribers because of the income, race, or religion of 
that group.

On the surface, that might sound feasible, until you look at the 
exceptions to the rule. According to the bill, it is not a violation 
of the anti-redlining language if video service is denied because 
"technical feasibility, commercial feasibility, operational 
limitations, or physical barriers preclude the effective provision of 
video service."  There's plenty of wiggle room in those 
exceptions -  perhaps call them excuses - if a phone company wants to 
be ultra-selective in where it builds.  All it has to do is to claim 
that it is not "commercially feasible" to build in areas where the 
residents might be less well off.

But wait, there's more. In the Senate bill, the movie companies get a 
long-cherished goodie, the "broadcast flag." That's a bit of code in 
an over-the-air digital TV signal that tells your set-top box or TV 
whether a program can be copied, saved, forwarded, or none of the 
above. Movie companies, which own TV shows, have tried for this 
clause for five years, and the FCC gave it to them in 2003. The U.S. 
Appeals Court for the District of Columbia Circuit overturned the 
regulation in May 2005 (in a case brought by Public Knowledge, the 
American Library Association and others), ruling that the FCC far 
exceeded its authority by attempting to control the design of 
consumer electronics. The ostensible reason for the "flag" is to 
prevent high-quality digital content from being stolen, and thus 
giving programmers an incentive to continue producing it. Viacom, in 
2002, told the FCC that unless the flag was implemented in 2003, CBS 
wouldn't put on any high-definition shows. Right.

Lastly, the record companies get in the Senate a bill a clean shot at 
satellite broadcasters. Again, the issue is whether consumers can 
record music they buy, in this case through a monthly fee. XM 
Satellite Radio has a device that not only stores songs, but allows 
consumers to listen to the songs in - shock! -- any order they 
choose, and not as programmed.  The recording industry considers such 
a feat to be a threat to their business because such song-saving 
represents a lost CD sale. The Recording Industry of America wanted 
content controls on radio, and got it in an earlier version of the 
bill. In the latest version, the FCC sets up a commission to come up 
with audio controls, and the bill makes sure the membership is 
stacked so that the proper outcome is assured.

Those are the highlights of a 159-page bill produced by Republicans 
who don't like big government-except when telephone, cable, movie and 
record companies come calling.





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