Susan M. Baldwin

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Net Neutrality Not Dead Yet!
Presentation for the National Association of
State Utility Consumer Advocates
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Topics

• Whats the problem?
• Background and definition
• Relevant FCC proceedings
• Myths about Net Neutrality

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Whats The Problem?

• A telecommunications-cable duopoly controls the
  broadband network and the way in which
  information flows over that network.
• Industry can deliberately slow or block packets
  traveling over the Internet.

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Whats The Problem?
Until recently, companies that provided Internet
access followed a de facto common carriage rule,
usually called network neutrality, which meant
that all Web sites got equal treatment. Network
neutrality was considered so fundamental to the
success of the Net that Michael Powell, when he
was Chairman of the F.C.C., described it as one
of the basic rules of Internet freedom.
-James Surowiecki, Net Losses, The New
Yorker, March 26, 2006, at 74.
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Background and Definition

• Net Neutrality is the equal treatment of all
  packets of the same type.
• Net Neutrality means that, for example, all http
  (run-of-the mill web viewing) packets are treated
  the same, all VoIP packets are treated the same,
  all video conferencing packets are treated the
  same, etc.

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FCC Proceedings

• Minimal net neutrality protection will sunset
  soon.
• FCC net neutrality is occurring in fragmented
  fashion.

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FCC Proceedings
Broadband Consumer Protection proceeding - WC
Docket 05-271 there is a strong likelihood
that ILECs will engage in anticompetitive
behavior that will harm consumers - New
Jersey Ratepayer Advocate, March 1, 2006 Such
discrimination against network content or
services is not sound public policy and will
inhibit the numerous innovations and consumer
benefits associated with broadband
networks. -NASUCA, January 17, 2006
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FCC Proceedings

• Mega-Mergers
• The Verizon-MCI and ATT-BellSouth mergers
  represent the consolidation of power over the
  basic infrastructure of the Internet the
  backbone.
• The more powerful and concentrated our facility
  providers grow, the more they have the ability,
  and perhaps even the incentive, to close off
  Internet lanes and block IP byways.
• - SBC-ATT Order, Statement of Commissioner
  Copps, at 139.

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FCC Proceedings

• Results of Mega-Mergers
• ATT serves 36 of retail residential lines
• Verizon 25 of retail residential lines
• Qwest 8 of residential lines
• Telco-Cable duopoly dominates residential
  broadband.
• Cable Modem 58
• Telco (DSL Fiber) 37
• Other (Satellite Wireless) 5

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FCC Proceedings

• The Verizon-MCI merger
• The merger was completed on January 6, 2006.
• Verizon must
• maintain as many settlement-free peering
  arrangements as it had on the merger closing date
  until January 2009.
• honor FCCs Net Neutrality principles until
  January 2008.

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FCC Proceedings

• FCCs Four Principles
• Consumers are entitled to
• access the lawful Internet content of their
  choice.
• run applications and use services of their
  choice, subject to the needs of law enforcement.
• connect their choice of legal devices that do not
  harm the network.
• competition among network providers, application
  and service providers, and content providers.

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FCC Proceedings

• ATT BellSouth Merger
• The merger was completed December 29, 2006.
• ATT must
• honor FCCs Net Neutrality Policy Statement until
  June 2009.
• maintain a neutral network and neutral routing
  in its wireline broadband Internet access
  service through December 2008.

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FCC Proceedings
The Merger Conditions Verizons Net Neutrality
commitments EXPIRE in January 2008. ATTs
Neutral Routing commitments EXPIRE in December
2008. ATTs Net Neutrality Policy Statement
commitments EXPIRE in June 2009.
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FCC Proceedings
Broadband Industry Practices proceeding WC
Docket No. 07-52 The ATT/BellSouth net
neutrality provision is the only
government-mandated directive for net neutrality
in the United States, and, therefore, represents
significant progress for consumer protection in
the emerging broadband era, which should be
extended universally to all consumers. -NASUCA,
June 2007
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FCC Proceedings

• Broadband Industry Practices proceeding
• WC Docket No. 07-52
• Recent ex partes include
• Senators Olympia Snowe and Byron Dorgan
• Department of Justice

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Myth vs. Reality
Myth 1 There isnt a problem theres no
evidence of abuse. The Reality Internet service
providers have blocked websites, degraded
service, and kicked users off the Net.
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Myth vs. Reality
Myth 2 Large users (e.g., Yahoo, Google) of
bandwidth should pay more to reach more
customers. The Reality Internet backbone owners
are inventing excuses in order to charge more to
end-users and service providers.
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Myth vs. Reality
Myth 3 Broadband access is a competitive market
and should not be regulated at all. The Reality
Broadband access is highly concentrated
ownership of the Internet backbone is even more
concentrated.
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Myth vs. Reality
Myth 4 Net Neutrality is an obstacle to the
engineering goals of achieving high Quality of
Service. The Reality Net Neutrality does not
need to be heavy-handed. Packet management is
OK. Packet censorship is not OK.
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Myth vs. Reality
Myth 5 Net Neutrality would inhibit innovation.
The Reality Net Neutrality enables Internet
users, not infrastructure owners, to determine
what products and services flourish.