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Politics 117 The regulation of the Internet The dot bomb: prelude to the crisis.

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Presentation on theme: "Politics 117 The regulation of the Internet The dot bomb: prelude to the crisis."— Presentation transcript:

1 Politics 117 The regulation of the Internet The dot bomb: prelude to the crisis

2 Early cable television 1972: 70 cable systems serving about 14,000 subscribers, mostly in mountainous or hill areas

3 1968 – 1972: FCC rules on cable television 1968: – movies and sports events on cable have to be at least two years old – Pay TV sites can only run in cities with more than four operating commercial stations – No commercials 1972: – Cable can expand to the top 100 markets, but has to offer channels to municipal governments and provide public access NBCs Sylvester Pat Weaver tried to build a cable network in California

4 Pacifica vs. FCC, 1978 FCC cannot edit broadcasts in advance But right to privacy trumps First Amendment FCC can prohibit indecent broadcasts when children likely to be listening

5 1984-1992: Congress unleashes cable 1984 Act deregulated cable From 1984 - 1992, cable subscribership rises from 37 million to 57 million. 1992, the percentage of homes passed by a cable wire goes from 71 percent in 1984 to 97 percent. But prices rose too fast 1992 Act gave cities and counties authority over cable rates again Requires cable companies to broadcast local TV signals

6 Telecommunications Act of 1996 Eliminated market barriers Abandoned the utility model of media regulation (one company in charge of cable, telephony, etc) Anybody can get into anything: phone, video, ISP service Almost 70 percent of U.S. households subscribe to cable by 1999: 65 million people

7 Computer Inquiry decisions (1966-1976) FCC calls for functional separation between basic phone service and data processing services among telcos (especially AT&T) From this concept Congress grafts the concept of telecommunications services and information services onto the Telecommunications Act

8 What is net neutrality? ISPs cant – Block applications because they compete with an ISP content service – Play favorites among content providers – Keep its network management practices secrret a neutral network should be expected to deliver the most to a nation and the world economically, by serving as an innovation platform, and socially, by facilitating the widest variety of interactions between people. Tim Wu

9 Brand X decision, 2005 FCC rules that cable systems are not telecommunications common carriers, they are information services Dont have to follow common carrier rules Dont have to interconnect with smaller providers at wholesale rates Takes cable ISPs off the regulatory hook 2005: Supreme Court approves the decision, 6-3

10 The FCCs Internet Policy Statement (August 2005) consumers are entitled – to access the lawful Internet content of their choice – Run applications of their choice – Connect their choice of legal devices that do not harm the network. – Have competition among network providers

11 Peer to peer (P2P) networking A system in which a network of people have the same files, and they allow their computer to become part of an open network for sharing files

12 Silicon Valley wants an Open Internet Google eBay Netflix Amazon Facebook Skype Twitter

13 Did Comcast engage in P2P blocking? Associated press and EFF share digital version of King James Bible using BitTorrent It repeatedly gets slowed down and blocked Comcast admits it uses network management techniques, then admits that it just plain blocked the app

14 FCC decision on Comcast, August 2008 Comcast must disclose the details of its discriminatory network management practices to the Commission ·Submit a compliance plan describing how it intends to stop these discriminatory management practices by the end of the year Disclose to customers and the Commission the network management practices that will replace current practices FCC hearing at Harvard Law School: Timothy Wu of Columbia; below right: David Cohen of Comcast

15 FCC Chair Kevin Martin on Comcast Would it be OK if the post office opened your mail, decided they didnt want to bother delivering it, and hid that fact by sending it back to you stamped address unknown – return to sender? Or would it be OK, when someone sends you a first class- stamped letter, if the post office opened it, decided that because the mail truck is full sometimes, letters to you could wait, and then hid both that they read your letters and delayed them? Unfortunately, that is exactly what Comcast was doing with their subscribers Internet traffic.

16 What Comcast did Used the RST (reset) method in the TCP protocol to interrupt P2P transmissions the company didnt like – When Comcast judges that there are too many peer-to-peer uploads in a given area, Comcasts equipment terminates some of those connections by sending RST packets – On its face, Comcasts interference with peer-to-peer protocols appears to contravene the federal policy of promot[ing] the continued development of the Internet

17 Comcast was not clear about what it was doing Comcasts claim that it has always disclosed its network management practices to its customers is simply untrue. Although Comcasts Terms of Use statement may have specified that its broadband Internet access service was subject to speed and upstream and downstream rate limitations, such vague terms are of no practical utility to the average customer.

18 Why the FCC sanctioned Comcast: The August 2008, Order Comcast has motive to discriminate: – Peer-to-peer applications, including those relying on BitTorrent, have become a competitive threat to cable operators such as Comcast because Internet users have the opportunity to view high-quality video with BitTorrent that they might otherwise watch (and pay for) on cable television. Such video distribution poses a particular competitive threat to Comcasts video-on-demand (VOD) service.

19 FCC: We have the authority FCC has power to act via Sec 230(b) of the Communications Act – (b) P OLICY.--It is the policy of the United States-- – (1) to promote the continued development of the Internet and other interactive computer services and other interactive media; – (2) to preserve the vibrant and competitive free market that presently exists for the Internet and other interactive computer services, unfettered by Federal or State regulation; – (3) to encourage the development of technologies which maximize user control over what information is received by individuals, families, and schools who use the Internet and other interactive computer services;

20 FCC: We have the authority FCC has power to act via Sec 706(a) of the Communications Act Congress charges the Commission with shall encourage the deployment on a reasonable and timely basis of advanced telecommunications capability to all Americans.

21 Ancillary power This language (and other parts of the Comm Act), give the agency ancillary authority to issue the Internet Policy Statement and to regulate Ancillary = supplementary

22 When we approved Adelphia buyout, we set conditions Comcast and Time Warner given ok to buy out Adelphia cable, but [i]f in the future evidence arises that any company is willfully blocking or degrading Internet content, affected parties may file a complaint with the Commission,125 and noted that Commissions Internet Policy Statement contains principles against which the conduct of Comcast[ and] Time Warner... can be measured. Adelphia under arrest; FCC approves TW and Comcast buyout of Adelphia network

23 McDowells dissent: ancillary authority isnt enough The majoritys view of its ability to adjudicate this matter solely pursuant to ancillary authority is legally deficient as well. Under the analysis set forth in the order, the Commission apparently can do anything so long as it frames its actions in terms of promoting the Internet or broadband deployment. Robert M. McDowell

24 McDowells dissent: we never made any rules We have no rules to enforce. This matter would have had a better chance on appeal if we had put the horse before the cart and conducted a rulemaking, issued rules and then enforced them.

25 Comcasts Helgi Walker (left) and the DC Circuit Court of Appeals (the guys)

26 DC Circuit throws out the FCCs Comcast Order "Statements of policy, by themselves, do not create 'statutorily mandated responsibilities'," -- David Sentelle


28 May 2010: The Third Way To the Four Freedoms Internet Policy Statement, the FCC would add – A non-discrimination rule (ISPs cant block) – A transparency rule (ISPs must disclose what theyre doing) FCC would reclassify ISPs as Title II common carriers, but forbear from regulating anything except non- discrimination rules For example, wouldnt regulate rates

29 Partisan pushback Republicans declare opposition to new net neutrality rules ISPs promise to sue FCC if agency establishes rules FCC delays proceeding...


31 Google reverses on net neutrality Issues legislative framework statement with Verizon calling for wireless to be exempted from net neutrality non- discrimination rules Lots of possible exemptions for priority access deals FCC wouldnt issue rules, just make case-by-case decisions based on a community advisory body (probably dominated by Google and ISPs) Darrel West, Brookings Institution

32 Where are we now?

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