New Markey/Eshoo net neutrality bill

Ed Markey (D-MA) and Anna Eshoo (D-CA) last week introduced HR 3458, The Internet Freedom Preservation Act of 2009 (PDF). This bill is much better than past bills in that it doesn't contain any prohibition on classes of service or preferential treatment of packets based on protocol or application, as opposed to based on source, destination, or owner. It still, however, gives the FCC new powers to regulate the Internet and puts the onus of developing specific regulations on the FCC. And it looks like the language will give the FCC the power to regulate Apple's iTunes store with respect to iPhone Internet-related applications, as well as to force the opening up of wireless walled gardens. The bill leaves open to the FCC the ability to treat "private transmission capacity services" as exempt from the requirements of the bill, so long as they don't impact Internet capacity for the end user. It also provides disclosure requirements for ISPs to report on any methods they use for network and capacity management that may impact Internet traffic.

"Fleeting expletives" FCC rule upheld

The FCC rule on "fleeting expletives," permitting massive fines even for individual occurrences of the "seven words you can't say on television," arguing that they always have sexual connotations even when used as an intensifier, was upheld by the U.S. Supreme Court in a 5-4 decision. The decision is noteworthy for using the terms "F-word" and "S-word" and "f***ing" and "s****" in its text, rather than spelling them out.

Clarence Thomas' concurrence in the majority, however, questioned the constitutional basis of the FCC's ability to regulate content. It should be just a matter of time before the FCC's ability to regulate indecency is curtailed, but the Supreme Court did not rule on that issue in this case.

Adam Thierer at the Technology Liberation Front has a thorough commentary:
Part 1, Part 2, Part 3, Part 4

Thierer points out that Scalia, purportedly a strict constitutionalist, in his decision has endorsed a brand-new justification for the FCC's power to regulate broadcast content. The original justification was that the airwaves were a scarce resource that needed to be protected for productive uses; the new argument is that because there are so many unregulated alternatives like cable, satellite, and the Internet, that the government needs to protect one last refuge from offensive content.

(Previously, previously.)

Netroots and telecom

There's a telecom panel at the Netroots Nation conference today on the subject of "Big Telecom: An Emerging Threat to Our Democracy?" The implied answer is yes, and it appears that every participant on the panel will be making that case. Here's the description of the panel:

Massive telecom companies control virtually all of our voice and internet communications these days—and new evidence shows a near-total lack of commitment to our democracy. AT&T has proposed filtering all content traveling on its network. Verizon tried initially to block NARAL's pro-choice text messages. Most telecom companies are fighting net neutrality. Can democracy survive an assault by those who control the tubes?

The panel members don't include anyone with any experience managing or operating an actual telecom network, but instead includes two people who have repeatedly demonstrated not only an ignorance of telecom law, technology, and policy, but who have misrepresented facts and failed to engage with the arguments of their critics, Matt Stoller and Timothy Karr (see posts on this blog in the "net neutrality" category). The closest person to a representative of a telecom is Michael Kieschnick of Working Assets, a company that is a reseller of long distance and wireless service on Sprint's network.

I agree with many of their positions--I don't think ISPs should be allowed to block websites on the basis of disagreement with content. I think ISPs should be transparent about their network management processes and filtering. Where I disagree with them is that they advocate that the FCC step in to regulate the Internet in a way that it has never had authority to do so before, and demand that network operators not be allowed to implement classes of service with different rates of charges, or even usage caps. Art Brodsky expresses the point which has also been made by Robb Topolsky of Public Knowledge, Timothy Karr of Free Press, and Matt Stoller:

In the name of "network management," some companies want to throttle down the use of legal applications, like BitTorrent which may, coincidentally, provide competition in entertainment programming. They want to impose usage caps across the board on all customers which would stifle innovation and curb the use of video (there's that anti-competitive meme again) without actually solving the problem of the so-called "bandwidth hogs." The way caps are being discussed now, they would only lead to higher prices and less usage for an industry that already charges more for less than most broadband providers around the world. Parts of our broadband industry may be the only sector in the world that wants to cut down the amount of its product it wants customers to use.

Brodsky's last sentence is clearly false--broadband is like a fixed-price all-you-can-eat buffet. All businesses want to maximize their profits by maximizing revenue and minimizing costs. When bandwidth is sold at a fixed cost in unlimited amounts, where a small number of users are consuming the majority of the service, it's in the business's interest to restrict those users or charge them more for what they consume in order to satisfy the rest in a cost-effective manner. The options are few--you can either restrict the "bandwidth hogs" in some way, charge them more so that they pay for what they use, or raise the price for everyone. These guys seem to advocate the latter approach, while I'm in favor of allowing all the options to be used in a competitive market. Where I disagree with Comcast's approach in issuing RST packets to block BitTorrent traffic is not that they did it, but that they were not transparent about what they were doing (and apparently didn't quite get it quite right--it should not have completely broken BitTorrent, but only slowed it down).

Brodsky's suggestion that Comcast has an interest in blocking BitTorrent because it provides competition in the entertainment space is absurd--they have an interest in blocking it because it's a very popular application which itself exploits Internet protocols in a way not anticipated by the designers in order to consume more bandwidth, getting around the congestion controls in TCP/IP by using multiple TCP streams. If BitTorrent traffic wasn't filling up the majority of Comcast's bandwidth, they'd have no interest in it, except when the MPAA and RIAA issue them subpoenas about their users infringing copyrights.

If the government prohibits the use of differential classes of service (which is already heavily used by private companies to give priority to applications within their enterprise which have requirements for low latency and jitter, such as real-time streaming audio and video, including Voice over IP) and requires that congestion be dealt with by building out infrastructure sufficiently that there will never be congestion no matter how many users max out their connectivity with BitTorrent, that will reduce competition by culling smaller companies out of the picture and making market entry more difficult. In any environment where a provider's upstream capacity is less than the sum of the capacity to every customer (and that's everywhere, today, and always has been), all-you-can-eat bandwidth is like a commons. The more that is available, the more the heavy users will consume, to the detriment of each other and the light users. Without setting caps and having tiered pricing or implementing technology that prioritizes packets and drops from the heavy users and from less-realtime-sensitive applications first (like BitTorrent), there are no incentives against consuming everything that is available.

I also think it's a huge mistake to have the FCC start regulating the Internet. FCC chairman Kevin Martin would no doubt love to place indecency standards and filtering requirements on Internet content. Once you open the door to FCC regulation of the Internet, that becomes more likely. And the FCC has been completely ineffectual at dealing with existing abuses like fraudulent telemarketing, illegal prerecord calls to residences and cell phones, caller ID spoofing, etc., already covered by statute and regulation. I'd rather see clear statutes that include private rights of action than entrust control of the Internet to the FCC. The FCC is a slow-moving bureaucracy, and AT&T and Verizon have the deepest pockets, the most lawyers, and the most personnel who have shuffled back and forth between government (including the NSA) and industry. That gives AT&T and Verizon the tactical advantage, and leads to less competition rather than more.

Which brings me to the warrantless wiretapping and telecom immunity issues, which Cindy Cohn of the EFF no doubt addressed on the Netroots Nation panel. I suspect I have little if any disagreement with her. I've long been a supporter of the EFF, as are many people involved in the management of ISPs. I strongly oppose telecom immunity for warrantless wiretapping, a complete abdication of Congress' responsibility to support the U.S. Constitution. But this shows the power of AT&T and Verizon. Not only did they get what they wanted, but the very infrastructure which was built to do this massive interception of traffic for the NSA and for law enforcement interception under the CALEA laws was built for them with assistance from government funds. All telecoms have to be compliant with CALEA (now including VoIP and broadband Internet providers), but the big incumbents who were most capable of affording it on their own got it at the lowest costs, while their competition was required to build it out at their own expense even if it never gets used.

But there are legitimate uses for deep packet inspection, for understanding the nature of the traffic on a network for management purposes, including tracking down security and abuse issues. Since it is in the hands of the end user to use encryption to protect sensitive content, I think use of DPI by network providers is reasonable for the purposes of providing better service in the same way that it's reasonable for a voice provider to intercept traffic for quality measurement purposes. It's also reasonable for interception to occur for "lawful intercept," but it should always require a court order (i.e., both executive and judicial branch approval) on reasonable grounds. The difficulty of obtaining wiretaps depicted in the television program "The Wire" is how it should be.

I've written a lot on these issues, much which can be found in this blog's Network Neutrality Index.

If any reader of this blog happens to have attended the Netroots Nation telecom panel or comes across a description of its content, please point me to it, as I'd like to see what was said. I don't have high hopes for the accuracy or reasonability of statements from Stoller and Karr, but I could be surprised, and the other panelists probably had interesting and important things to say.

(See my Blogger profile for the disclosure of my employment by Global Crossing, which is currently listed by Renesys as the #3 network provider on the Internet in terms of number of customers, ahead of AT&T and Verizon, behind Sprint and Level 3.)

UPDATE: The "Big Telecom" panel was live-blogged (dead, unarchived link: http://openleft.com/showDiary.do;jsessionid=C865142FFB85E14AAD27045B9A342B15?diaryId=7032"). Stoller's anecdote about the Bill of Rights on metal is referring to Dean Cameron's "security edition" of the Bill of Rights, which was also promoted by Penn Jillette.

Parents Television Council demonstrates their own pointlessness

The Parents Television Council, the organization that is responsible for generating over 99.8% of all indecency complaints to the FCC, has further demonstrated its own complete pointlessness by putting out a website that assembles a collection of the most indecent clips from broadcast television, with no parental controls of any kind on the page. Each clip is categorized with labels like "sex," "violence," and "foul language."

What's a kid more likely to come across? A five-second bit in one of thousands of television shows, or a huge collection of the worst of the worst all in one place on the Internet?

It's high time for broadcast television indecency rules to be dropped.

(Via The Agitator.)

FCC Chairman Kevin Martin responds to ruling on "fleeting expletives"

FCC Kevin Martin has responded to the Second Circuit Court of Appeals' decision on "fleeting expletives," which not only went completely against the FCC but suggested that the grounds for the FCC's authority to regulate indecency on the broadcast airwaves may no longer exist. Here's part of what he had to say:

I completely disagree with the Court’s ruling and am disappointed for American families. I find it hard to believe that the New York court would tell American families that “shit” and “fuck” are fine to say on broadcast television during the hours when children are most likely to be in the audience.

The court even says the Commission is “divorced from reality.” It is the New York court, not the Commission, that is divorced from reality in concluding that the word “fuck” does not invoke a sexual connotation.

Here's Daniel Drezner's response:

1) Did Martin write this himself or did people with actual training in press relations whip this statement up?

2) By the FCC's interpretation, is Martin is obnoxiously hitting on erveryone who reads his statement?

3) Am I obviously encouraging rape and bestiality when I say, "F#$% Kevin Martin and the horse he rode in on?" or could I have a different intent in mind?

4) As [Jonathan] Adler asks, "Given the Second Circuit's ruling, could a network air Martin's remarks without fear of federal sanction?"

Read Drezner's full post here.

UPDATE (April 28, 2009): The U.S. Supreme Court has reversed the 2nd Circuit in a 5-4 decision.

Phoenix mortgage fraud

The Arizona Republic has just caught on to the fact that there's a lot of mortgage fraud going on in Phoenix:

A wave of mortgage fraud is rippling through pockets of the Valley, inflating home values through scams called cash-back deals.

Left unchecked, cash-back deals cost homeowners and lenders millions of dollars and could erode confidence and values in Arizona's real estate market.

The fraud involves obtaining a mortgage for more than a home is worth and pocketing the extra money in cash. Neighbors may then discover home values in the area are exaggerated. Homeowners stuck with overpriced mortgages may never recover the difference. And lenders end up with bad loans that, in the long run, could hurt the Arizona real estate market, the largest segment of the state economy.

While the extent of the fraud is unclear, an Arizona Republic investigation into these cash-back deals found organized groups of speculators have bought multiple homes this way, leaving whole neighborhoods with inflated values. Add to these the individual deals done by amateurs who hear others talk about the easy money they made from cash-back sales.

State investigators and real estate industry leaders want more enforcement and greater public awareness to stop the spread of cash-back deals before the damage mounts.

"Mortgage fraud in the Valley has become so prevalent people think it's a normal business practice," said Amy Swaney, a mortgage banker with Premier Financial Services and past president of the Arizona Mortgage Lenders Association.

Under federal law it is illegal to misrepresent the value of a home to a lender. Everyone who is a party to the deal is subject to prosecution.

Felecia Rotellini is a Notre Dame law school graduate and former assistant attorney general who is now superintendent of the Arizona Department of Financial Institutions. Her agency regulates mortgage lenders, state banks and credit unions in the state. Alarmed by what she was hearing from lenders and real estate agents, she has just pulled together state and federal regulators to form an Arizona mortgage fraud task force.

"People need to understand these cash-back deals are illegal and stop," she said. "We are going after mortgage fraud."

I think this is likely to be too little, too late. When I was actively suing telemarketers using illegal prerecorded calls to residences in 2003, the worst offenders were mortgage brokers. In the process of going after some of them, I found signs that some of them were engaged in other illegal activities as well, such as defrauding other lenders, defrauding their customers, defrauding the IRS and Arizona Department of Revenue, and transferring assets between entities prior to filing bankruptcy to evade creditors. I found the Arizona State Department of Banking (now known as the Arizona State Department of Financial Institutions), which regulates mortgage brokers, to be completely uninterested in investigating--though they did send some warning letters after I won judgments against brokers, which prompted some of them to pay their judgments. They said that they did not have resources to investigate my claims of violations, even though I offered up specific areas of the law that they are supposed to enforce (they don't enforce the Telephone Consumer Protection Act or FCC regulations).

There's more on this subject at Ben Jones' Housing Bubble Blog.

UPDATE (January 22, 2007): Arizona Senator Jay Tibshraeny has introduced a bill making mortgage fraud a felony. But it's already criminal activity covered under current laws--adding more laws against it doesn't do anything to cause those laws to be enforced.

Jack Shafer on the case for abolishing the FCC

At Slate, Jack Shafer argues for the abolition of the FCC, drawing heavily from Peter Huber's book, Law and Disorder in Cyberspace.

For a critique of Huber, see Tom W. Bell's "The Common Law in Cyberspace" from the Michigan Law Review (1999, vol. 97, pp. 1746ff).

(Hat tip to Jesse Walker at the Reason blog.)

Bush administration's suppression of information it didn't like

Talking Points Memo has been collecting examples of information (website content, reports, studies, etc.) that the Bush administration has suppressed because they were somehow contrary to the administration's positions.

The list has become fairly lengthy. Here's what they've got so far:

* In March, the administration announced it would no longer produce the Census Bureau’s Survey of Income and Program Participation, which identifies which programs best assist low-income families, while also tracking health insurance coverage and child support.

* In 2005, after a government report showed an increase in terrorism around the world, the administration announced it would stop publishing its annual report on international terrorism.

* After the Bureau of Labor Statistics uncovered discouraging data about factory closings in the U.S., the administration announced it would stop publishing information about factory closings.

* When an annual report called “Budget Information for States” showed the federal government shortchanging states in the midst of fiscal crises, Bush’s Office of Management and Budget announced it was discontinuing the report, which some said was the only source for comprehensive data on state funding from the federal government.

* When Bush’s Department of Education found that charter schools were underperforming, the administration said it would sharply cut back on the information it collects about charter schools.

* The National Oceanographic and Atmospheric Administration (NOAA) has to date failed to produce a congressionally-mandated report on climate change that was due in 2004. Sen. John McCain (R-AZ) has called the failure an "obfuscation."

* The Environmental Protection Agency (EPA) recently announced plans to close several libraries which were used by researchers and scientists. The agency called its decision a cost-cutting measure, but a 2004 report showed that the facilities actually brought the EPA a $7.5 million surplus annually. (Thanks to Mark B. below.)

* On November 1st, 2001, President Bush issued an executive order limiting the public's access to presidential records. The order undermined the 1978 Presidential Records Act, which required the release of those records after 12 years. Bush's order prevented the release of "68,000 pages of confidential communications between President Ronald Reagan and his advisers," some of whom had positions in the Bush Administration. More here. (Thanks to Roger A. and nitpicker below.) Update: TPMm Reader JP writes in to point out that Bush did the same thing with his papers from the Texas governorship.

* A rule change at the U.S. Geological Survey restricts agency scientists from publishing or discussing research without that information first being screened by higher-ups at the agency. Special screening will be given to "findings or data that may be especially newsworthy, have an impact on government policy, or contradict previous public understanding to ensure that proper officials are notified and that communication strategies are developed." The scientists at the USGS cover such controversial topics as global warming. Before, studies were released after an anonymous peer review of the research. (Thanks to Alison below.)

* A new policy at the The U.S. Forest Service means the agency no longer will generate environmental impact statements for "its long-term plans for America's national forests and grasslands." It also "no longer will allow the public to appeal on long-term plans for those forests, but instead will invite participation in planning from the outset." (Thanks to libra below.)

* In March 2006, the Department of Health and Human Services took down a six-year-old Web site devoted to substance abuse and treatment information for gays and lesbians, after members of the conservative Family Research Council complained.

* In 2002, HHS removed information from its Web site pertaining to risky sexual behavior among adolescents, condom use and HIV.

* Also in 2002, the Federal Energy Regulatory Commission removed from its Web site a document showing that officials found large gaps in a portion of an aging Montana dam. A FERC official said the deletion was for "national security."

* In 2004, the FBI attempted to retroactively classify public information regarding the case of bureau whistleblower Sibel Edmonds, including a series of letters between the Justice Department and several senators.

* In October 2003, the Bush administration banned photographs depicting servicemembers' coffins returning from overseas.

* In December 2002, the administration curtailed funding to the Mass-Layoffs Statistics program, which released monthly data on the number and size of layoffs by U.S. companies. His father attempted to kill the same program in 1992, but Clinton revived it when he assumed the presidency.

* In 2004, the Internal Revenue Service stopped providing data demonstrating the level of its job performance. In 2006, a judge forced the IRS to provide the information.

* Also in 2004, the Federal Communications Commission blocked access to a once-public database of network outages affecting telecommunications service providers. The FCC removed public copies and exempted the information from Freedom of Information Act requests, saying it would "jeopardize national security efforts." Experts ridiculed that notion.

* In 2002, Bush officials intervened to derail the publication of an EPA report on mercury and children's health, which contradicted the administration's position on lowering regulations on certain power plants. The report was eventually leaked by a "frustrated EPA official."

* In 2003, the EPA bowed to White House pressure and deleted the global warming section in its annual "Report on the Environment." The move drew condemnations from Democrats and Republicans alike.

* Also in 2003, the EPA withheld for months key findings from an air pollution report that undercut the White House's "Clear Skies" initiative. Leaked copies were reported in the Washington Post.

* For more than a year, the Interior Department refused to release a 2005 study showing a government subsidy for oil companies was not effective.

* The White House Office of National Drug Policy paid for a 5-year, $43 million study which concluded their anti-drug ad campaigns did not work -- but it refused to release those findings to Congress. (Thanks to skeptic below.)

* In 2006, the Federal Communications Commission ordered destroyed all copies of an unreleased 2004 draft report concluding that media consolidation hurt local TV news coverage, which runs counter to the administration's pro-consolidation stance. (Thanks to Jim Tobias below.)

* After Bush assumed power in 2001, the Department of Labor removed from its Web site "Don't Work in the Dark -- Know Your Rights," a publication informing women of their workplace rights. (via the National Council for Research on Women)

* The Department of Labor also removed from its Web site roughly two dozen fact sheets on women's workplace issues such as women in management, earning differences between men and women, child care concerns, and minority women in the workplace. (via the National Council for Research on Women)

* In February 2004, the appointed head of the Office of Special Counsel -- created to protect government employees' rights -- ordered removed from a government Web site information on the rights of gay men, lesbians and bisexuals in the public workplace. (via the National Council for Research on Women)

* In early 2001, the Treasury Department stopped producing reports showing how the benefits of tax cuts were distributed by income class. (via the Tax Policy Center, from Paul Krugman)

FCC Indecency Rules

Looks like the FCC had a hard day before the U.S. Court of Appeals defending its arbitrary indecency standards, and Susan Crawford points out an example of just how absurd those standards have become in the era of YouTube.

UPDATE (June 4, 2007): The Second Circuit Court of Appeals has issued its decision in Fox Television Stations v. the FCC, and the FCC has decisively lost. Adam Thierer points out how the case could pave the way for completely removing the FCC's authority to regulate content for indecency. Susan Crawford reports on the content of the decision in the form of a letter to the FCC.

UPDATE (April 28, 2009): The U.S. Supreme Court has reversed the 2nd Circuit in a 5-4 ruling.

How well connected is your zip code?

The Center for Public Integrity has set up a "Media Tracker" based on FCC data by zip code which allows you to see how well-connected your zip code is. For each zip code, it will list the number of broadband providers and the number of owners of various media resources in your area (newspapers, radio and television stations. My zip code comes up as "well connected" with 18 broadband providers (a few more than the ones I identified in my survey of Phoenix-area broadband providers).

ACLU incompetence and misinformation on net neutrality

I received an email from the ACLU yesterday, informing me that they've jumped in on the net neutrality debate. Unfortunately, they badly misrepresent the facts:

FREE THE NET: WHY YOU SHOULD CARE ABOUT NET NEUTRALITY

The keys to the Internet have always been safely in public hands - until last year, when the FCC suddenly repealed longstanding Internet principles of "neutrality" and non-discrimination.

The ACLU is going to make the erroneous claim that I've debunked repeatedly on my blog (see the Net Neutrality Index)--that the common carriage requirements on telcos constitute "net neutrality." They will ignore the fact that cable companies--the main providers of consumer broadband Internet access in the U.S.--have never been common carriers and have never been bound by these requirements.

With the blessing of the Supreme Court, a handful of profit-driven telecoms and cable companies now could effectively shut down the 21st Century marketplace of ideas by screening Internet e-mail traffic, blocking what they deem to be undesirable content, or pricing users out of the marketplace.

The ACLU is going to argue that we need to create a new bureaucratic regulatory apparatus, giving sweeping new powers to the FCC to interfere with freedom of Internet providers to enter into voluntary contracts with each other and manage their own networks, and specifically prohibiting differential pricing on tiered levels of service and the ability for providers to enter into arrangements with content providers to subsidize consumer bandwidth.

Historically, Net Neutrality protections filled the free speech gap. Since those protections were removed last year, nothing prevents network providers from discriminating against Internet users and application and service providers in terms of content, quality of access, and choice of equipment.

This is doubly false--the common carriage requirements applied only to the last-mile consumer network connections, not to the ability of ISPs to filter; and it is false that "nothing prevents" ISPs from taking actions which would cause them to lose customers.

If you're like many people using the Internet, you don't think about whether your Internet Service Provider is intentionally slowing down or speeding up your access to Yahoo! versus Google. Without Net Neutrality, your ISP could do just that.

Imagine if your phone company was allowed to own restaurants and then provided good service and clear signals to customers who called Dominos and static and frequent busy signals for those calling Pizza Hut.

It sounds outrageous, but it would be entirely possible if the telephone system wasn't regulated under the "common carrier" framework. The telecoms and cable companies that provide Internet network services, including AT&T, BellSouth, Comcast, Qwest, Sprint, Time-Warner/AOL, and Verizon, have spent over $100 million lobbying Congress and the FCC to eliminate established Net Neutrality protections.

Remember, cable companies have never been common carriers, yet this hasn't been a problem. Why create new regulations and give more power to a government agency that has a history of not only working on behalf of the big incumbents (rather than promoting competition, which is what is needed) but of engaging in actions designed to cause discrimination against certain forms of content through censorship? It makes no sense.

The assault on Internet freedom will only get worse. The FCC imposed Net Neutrality protections in merger agreements for certain network providers such as SBC/AT&T and Verizon/MCI, but those protections expire in 2007. And in July 2006, the FCC declined to include any Net Neutrality protections in Comcast and Time-Warner's acquisition of Adelphia Cable. The pattern of the FCC opposing Net Neutrality is expected to continue, as network providers continue to consolidate into an even smaller pool of Internet gatekeepers.

Without the vigorous non-discrimination principles in place before 2005, a few corporate conglomerates will control everything that you can say or do on the Internet. Net Neutrality is needed, and it is needed now.

The above argument is a mish-mash of fear-mongering about things that haven't been an issue, misrepresentation of what regulations have been in place, wild unsubstantiated claims ("a few corporate conglomerates will control everything that you can say or do on the Internet"?), and a failure to look at the actual substantive issues in the network neutrality debate.

Their website contains further misinformation:

Massive innovation on the Internet since its creation is in part the result of pre-2005 Net Neutrality protections. Starting nearly forty years ago, the Federal Communications Commission (FCC) concluded that under Title II of the Communications Act, telephone companies and network owners were prohibited from interfering with or discriminating against "telecommunications services" offering computer network access. The availability of common carrier telephone networks to independent equipment manufacturers and Internet Service Providers (ISPs) led to the Internet's birth. Entrepreneurs freely developed pioneering services and products resulting in a technological revolution driving our Nation's economic growth in the last decade.

Again, Title II has never applied to cable companies (or to ISPs that aren't telcos).

All of those protections were suddenly lost last year after the Supreme Court's decision in NCTA v. Brand X. Since 2002, the FCC attempted to reverse decades of applying Title II's nondiscrimination principles to net providers by reclassifying cable modem services as unregulated "information services."

ISPs and cable companies have never been Title II common carriers.

Federal courts initially rejected the FCC's efforts to strip long-standing Net Neutrality protections. In mid-2005, the Supreme Court abruptly reversed course in Brand X by concluding that the FCC had that discretion, notwithstanding well-established consumer protections.

Following that ruling, network owners began taking steps to stifle innovation and freedom on the Internet.

No examples are provided. Actual cases of discrimination are very few and far between, and have been quickly resolved.

They have stated their intent to establish tollbooths on the Information Superhighway by restricting fast lanes to those willing and able to pay high premiums.

It has always been the case that you have to pay more for more bandwidth and to put your content closer to your users, and that will not change with network neutrality regulations. This description fails to present the point of tiered services, which are necessary to deploy new kinds of services on the network (such as those dependent on near-real-time packet delivery) without allowing them to be disrupted by services which don't have such dependencies. By prohibiting tiered services, you prohibit the development and innovation that they can bring, and will doom us to VoIP telephony that is inferior to old-fashioned telephone service.

Some network owners, such as Time Warner's AOL and BellSouth, have already blocked user content.

The AOL case was an inadvertent blocking of email from a particular domain that was quickly corrected; I don't know what BellSouth instance is referred to. Probably most, if not all ISPs and content providers have blocked access to some user content at some point, due to that content being illegal (e.g., copyright infringement, child porn).

Internet discrimination will only increase after the 2007 expiration of Net Neutrality restrictions in merger agreements for other network owners such as SBC/AT&T and Verizon/MCI.

Why? Any provider that blocks content that its customers want to access puts itself at a competitive disadvantage.

S. 2917, the Snowe-Dorgan "Internet Freedom Preservation Act," restores longstanding Net Neutrality protections missing from S. 2686.

In its current form, S. 2686, the Communications, Consumer's Choice, and Broadband Deployment Act of 2006, permits Net discrimination to continue unabated. The bill provides no protection for Internet users and entrepreneurs. Instead, it merely includes a toothless requirement that the FCC study the Internet market for five years and file annual reports to Congress on the activities of network owners.

This is not true--it contains the FCC "four freedoms" including nondiscrimination, and provides for fines for providers who discriminate. What it doesn't do that the Snowe-Dorgan bill does is prohibit tiered classes of service.

In sharp contrast, S. 2917, the Internet Freedom Preservation Act offered by Senators Snowe and Dorgan, restores Network Neutrality protections in place before June 2005.

This is inaccurate--it does not reverse Brand X (which would amount to a new requirement--that has never previously been in effect--for cable companies to allow any ISP to sell Internet service through their networks). It creates new restrictions on broadband Internet that have never previously existed, affecting non-telco ISPs as well as cable providers.

It requires that any content, application, or service offered through the Internet be provided on a basis that is "reasonable and non-discriminatory" and equivalent to the access, speed, quality of service, and bandwidth of services offered by network owners. It further prohibits network providers from blocking or degrading lawful Internet content. Finally, it leaves the choice for attaching legal devices to networks squarely in the hands of consumers, where it rightfully belongs.

If it only prohibited providers from blocking or degrading lawful content, I'd have no problem with it--but it goes far beyond that.

It is disappointing to see the ACLU get this issue so wrong.

Telecom regulation around the world

Paul Kouroupas has written an interesting series of posts about the state of telecommunications regulation around the world. He postulates a hypothetical company, CoolCo, that is an ISP that wants to sell Internet access, voice over IP, email, instant messaging, and web hosting to residential customers, while not owning any of its own transmission facilities. CoolCo wants to expand its services to include dedicated circuits for business customers, and is majority owned by U.S. investors with a Thai investor who owns 15% of the company.

Kouroupas then looks at how CoolCo would fare in Europe, Latin America, Asia, and the United States with respect to licensing requirements, license fees and other fees, foreign ownership restrictions, tariff, contract and pricing rules, interconnection rights and obligations, and the efficiency and effectiveness of the regulatory process.

He begins with Europe--licensing requirements are nonexistent; operators must simply "register and abide by a set of basic consumer protection obligations and regulations." License fees are nominal and consistent across the entire EU. There are no universal service fees or foreign ownership restrictions. There are no tariff requirements, no contract requirements beyond "conformity to basic legal precedence," no pricing rules "other than basic non-discrimination requirements." No regulator approval is required to set prices. Interconnection is mandatory, some states require unbundling of services by the incumbents. The regulatory process is relatively efficient and does not consume the bulk of CoolCo's resources.

In Latin America, Kouroupas looks at Argentina, Brazil, Chile, Mexico, Panama, Peru, and Venezuela, the countries where Global Crossing operates, and shows that there is a large amount of variation between countries, with Argentina, Brazil, and Chile being more open and adaptable, and Mexico, Panama, Peru, and Venezuela having more heavy-handed regulation. All have licensing requirements, with the less-regulated three and Peru requiring only a single license for CoolCo's offerings, while Mexico, Panama, and Venezuela require separate licenses for each service offered. All have license fees as a percentage of revenue, ranging from 0.5% to 3%. Universal service fees fall in the same range. Only Mexico has foreign ownership restrictions. Mexico, Peru, and Venezuela heavily regulate prices, tariffs, and form of contracts. Most countries require some form of interconnection, but in Mexico the incumbent (Carlos Slim's Telmex, which was privatized in the worst possible way) has been the recipient of multiple complaints for taking steps to avoid or delay the implementation of interconnection. In most countries the incumbent telco is the largest employer in the country and has considerable influence over the regulatory process, which often fails to complete by the legal time limits, leaving competitive telcos in legal limbo for months or years.

Kouroupas then turns to Asia, looking specifically at Australia, Hong Kong, Japan, Singapore, South Korea, and Taiwan, with a brief look also at China and India. The former countries, unsurprisingly, are more open than the latter two, though the level of bureaucracy is also high in Japan and Taiwan. China, India, and South Korea have foreign ownership restrictions, at least for facilities-based operators.

Finally, he looks at the United States, which is hampered by a lack of consistency and coherent regulations, especially with respect to VoIP. Licenses are not required at the moment, but the FCC appears to have opened the door for it, and there are some specific requirements that now apply such as CALEA and E911. VoIP providers will have to contribute to the universal service fund by assuming that 64.9% of their traffic is interstate, which means paying 10.5% of 64.9% of their revenue. Foreign ownership restrictions exist, but CoolCo should not hit them at the moment due to its foreign ownership of less than 25% and its not requiring licensing, but this could change. There are no tariff, contract, or pricing rules that apply. For VoIP there are currently no interconnection rights and unbundling is limited. The regulatory process exists at both the federal (FCC) and state (public utility commissions) level. At the federal level, regulation is incredibly inefficient; at the state level it varies considerably from state to state but is generally more efficient than at the federal level and has promoted competition. The overall picture is one of uncertainty about the future.

I've only touched on the highlights of the detail in Kouroupas' posts, but it's clear that CoolCo will find Europe to be the easiest region to establish business in today. Check them out.

A version of net neutrality I can endorse

In an attempt to offer something constructive, here's a version of network neutrality--let's call it Lippard Network Neutrality--that seems to me to be reasonable, providing me with what I want as a consumer of Internet services and what I would want if I were managing security for the provider of those services:

1. Nondiscrimination

Companies that provide facilities-based wireline broadband (i.e., those who own the last-mile wires) to residences must provide unrestricted Internet access to their customers who wish to purchase Internet access, allowing the use of any Internet service or application that does not violate any laws or cause degradation or disruption to the service or other customers. The provider may engage in filtering for consumer-grade service in order to prevent the spread of malware and the sending of spam, including (for example) SMTP filtering or redirection to the provider's mail services, but must allow the purchase of business-grade service under which customers may operate their own mail servers. The provider retains the right to suspend service or quarantine users that send spam, become compromised with malware, or engage in illegal activity or activity that disrupts the service.

2. Unbundling

Providers must unbundle Internet access from other services sold over the same connection, so that a customer may use the entire capacity of the circuit for Internet access.

These two requirements would give me what I want as a customer, as well as give the provider the ability to recover their costs, provide services that use QoS, provide additional filtering to protect their network and the rest of their customer base from malware, and so on. I think it's quite reasonable for a basic consumer Internet service to do port 25 filtering, force the use of the provider's mail servers, and to do network-based filtering of malware--but I would like the ability to pay extra for completely unfiltered Internet service and take steps to protect myself. And in fact, that's what I'm currently paying Cox for today--I pay for business-grade service to my home in order to run my own servers here, though I could put those servers into a colo facility and get the same effect, which is what I would do if Cox decided to discontinue offering business-class service to residences. Because that option exists, it would not be necessary to mandate that providers must provide business class service as I described above, but I'd still want to be able to ensure that I could access my remotely hosted services from home.

How this differs from what many network neutrality advocates are arguing for:

1. I don't prohibit QoS or tiering, as that is a genuinely useful network feature where I expect to see future innovation of services that depend on it.
2. The nondiscrimination provision is written to allow some kind of less-than-full-Internet walled garden service at low cost--so long as customers can still purchase real Internet service. (I think such a service would be under competitive pressure to allow access to the full Internet, for the same reason AOL ended up allowing full Internet access--otherwise the service wouldn't attract enough users to be a successful product offering.)
3. I don't prohibit differential pricing for different services and classes of service.
4. I don't set any restrictions on contractual arrangements (apart from these two restrictions), including interconnection agreements or who pays. I think that should be left to private negotiation and competition.
5. I don't extend these requirements to other types of Internet providers such as backbone providers or those providing business services, as those are areas with plenty of competition.
6. I don't extend these requirements to wireless providers, because I think that with sensible market-based allocation of spectrum, there could be plenty of independent competition with much less capital expenditure than for wireline deployment.

I could possibly be persuaded that there is a place for common carriage requirements, especially for access circuits to businesses, which is where the last-mile providers could really engage in anti-competitive behavior against backbone providers that don't own a lot of last-mile wires (e.g., Level 3, Global Crossing, Sprint), now that the major telco last-mile providers have each merged with a major backbone provider themselves (Qwest/U.S. West, AT&T/SBC/BellSouth, Verizon/MCI). This requirement currently exists in the law for telcos, and unlike the common carriage requirement for DSL, is not planned to go away next year.

I would not put the above into the purview of the FCC, at least not with their current dispute resolution procedures which favor the telcos. Paul Kouroupas at Global Crossing (also my employer) has been arguing for "baseball-style" or final arbitration dispute resolution, where each side submits their best and final offer to an arbitrator, who chooses the best. This provides incentive for each side to try to reach the best agreement up front, as well as a process that can proceed quickly, without any government involvement or expense. This suggestion is the second point of Global Crossing's proposed REFORM legislative agenda. (Unbundling and common carriage of bottlenecks such as last-mile access circuits are the sixth point.)

Comments, criticisms? I should add that I believe what I've spelled out above is pretty close to what I've heard is in Sen. Stevens' telecom reform bill, though I haven't read it and I suspect he applies the nondiscrimination and unbundling requirements more widely than to residential broadband.

Extending CALEA to VoIP: a bad idea

The Information Technology Association of America (ITAA) has issued a report on “Security Implications of Applying the Communications Assistance to Law Enforcement Act to Voice over IP” (21-page PDF) by Steven Bellovin, Matt Blaze, Ernest Brickell, Clinton Brooks, Vinton Cerf, Whitfield Diffie, Susan Landau, Jon Peterson, and John Treichler. This report comes at a time when the FCC and courts have already ruled that VoIP and facilities-based broadband providers must provide lawful interception capabilities under CALEA for VoIP services that are “interconnected” with the publicly-switched telephone network (PSTN).

The report effectively argues that in order to extend CALEA compliance to VoIP, “it is necessary either to eliminate the flexibility that Internet communications allow—thus making VoIP essentially a copy of the PSTN—or else introduce serious security risks to domestic VoIP implementations. The former would have significant negative effects on U.S. ability to innovate, while the latter is simply dangerous.”

The report gives a good basic explanation of VoIP (which comes in a variety of possible flavors), an explanation of pre-CALEA wiretapping and current CALEA wiretapping (including cellular telephone wiretapping and roving wiretaps), and then describes the similarities and differences between the Internet and the PSTN.

It then describes the issues of security raised by applying CALEA to VoIP and the risks to innovation created by applying CALEA to VoIP.

Two of the key problems for applying CALEA to VoIP are:

• VoIP mobility. A VoIP phone can be plugged in anywhere on the Internet, for non-facilities-based VoIP providers like Vonage. The network that connects the VoIP phone to the Internet—which is the one in a position to intercept the call data--need not be the network of the VoIP provider, or have any relationship with the VoIP provider.
• VoIP identity agility. A VoIP user can have multiple VoIP providers and easily switch between them from moment to moment. The owner of the Internet access network is not in a position to know who a VoIP user is purchasing VoIP services from. They are in a position to be able to intercept and detect what VoIP providers the user connects to directly, but not if the VoIP user is using encrypted traffic through proxies.

Further problems are caused by the fact that the communications between two VoIP phones is peer-to-peer, and the routing of a call at the IP layer can change in mid-call. Because of the former issue, the call contents may not traverse the VoIP provider's network, and thus it will not be in a position to intercept (unless it behaves like the PSTN, forcing the call contents to also come through its network, using SIP proxies/RTP relays). In order to truly be able to intercept all VoIP calls using VoIP as it is designed, there would have to be cooperation between the VoIP user’s access provider of the moment (which could be any Internet provider—a WiFi hotspot, a friend’s ISP, a hotel’s Internet connection) and the VoIP provider being used—but law enforcement may not be in a position to know either of these. The kind of cooperation required would have to be very rapid, with interception equipment and systems already in place and able to eavesdrop wherever the voice traffic may flow, upon appropriate request. This would require extensive coordination across every VoIP and Internet provider in the United States of a sort that doesn’t exist today. It would require extremely careful design and implementation to avoid creating vulnerabilities that would allow this incredibly complex infrastructure to be exploited by unauthorized users--but with so many parties involved, I think that's a pipe dream. This incident with cellular telephony in Greece shows what can already happen today with unauthorized parties exploiting CALEA technology.

And the FCC has ordered that it be in place by May 14, 2007. There’s no way that’s remotely possible--note that the FCC gave ordinary wireline telephone companies over a decade to implement CALEA in the PSTN, and it has been an extremely difficult and expensive process. At best, by the deadline facilities-based VoIP providers will be able to provide interception for call traffic that goes across their own networks, and apparently be forced to do that for all traffic (or else there would be a way to distinguish calls being rerouted for interception from all other calls). And if that's the only kind of VoIP that is permitted, VoIP innovation is stifled.

One company that has been pushing hard for these extensions of CALEA is Verisign. They have been doing so because they want to act as the one-stop-shop for U.S. law enforcement, setting up their own infrastructure to interconnect with all Internet and VoIP providers to provide everything from subpoena handling to wiretapping services under contract to the providers. This would effectively hand off wiretapping capability to a third party, working on behalf of the government, over which the individual providers would have little oversight.

For more on CALEA, see the Electronic Frontier Foundation's CALEA website. For more on the history and politics of wiretapping, see Whitfield Diffie and Susan Landau's excellent book, Privacy on the Line: The Politics of Wiretapping and Encryption.

UPDATE July 7, 2006: I've updated the above text in light of Charles' comment, to make it more accurate about interception by forcing VoIP calls to route through the VoIP provider's network.

Update on Cox blocking of Craigslist

The original claim of a Cox "blacklist" originated from a statement by Tom Foremski at Silicon Valley Watcher. Foremski originally wrote:

Back on February 23rd Authentium acknowledged that their software is blocking Craigslist but it still hasn't fixed the problem, more than three months later. That's a heck of long time to delete some text from their blacklist.

Now, he says (quoted by George Ou at ZDNet):

I assumed there was a blacklist - I have no idea how Craigslist is being blocked

In fact, we know now that it's a combination of a bug in a firewall driver produced by Authentium software and unusual (but not incorrect) behavior by the Craigslist webserver setting the initial TCP window size to 0. The facts of the problem came out (at least between Craigslist, Cox, and Authentium) at the time the problem was first reported, was fixed in a beta release within weeks, and has only affected Cox customers who use Authentium's security suite.

BTW, I disagree with Richard Bennett and George Ou's remarks which attribute the problem entirely or largely to Craigslist--the behavior of the server is not contrary to the RFC. The initial SYN packet from the client to Craigslist is responded to by Craigslist with a SYN-ACK packet with window size of zero, which means don't send me any data, only an ACK. The client then sends an ACK (completing the three-way TCP handshake), at which point Craigslist sends an ACK packet with a larger window size which the pre-fix version of the Authentium software fails to process. The initial response of the Authentium software to slow down is a reasonable and apparently desired response by Craigslist--they want new clients to hold off transmitting data (an HTTP request) until they give the OK. Authentium took full responsibility for the problem, and they were right to do so.

The story from Foremski was uncritically repeated by Matt Stoller at MyDD, Timothy Karr at Save the Internet (and a couple of other blogs), and now in a Wall Street Journal op-ed piece by Sen. Ron Wyden (D-OR), in a lapse from his normally good judgment about Internet-related matters (e.g., the Cox/Wyden Internet Freedom Act of 1995 and the Cox/Wyden Internet Tax Freedom Act of 1998).

Stoller and Karr went on to repeat the "blacklist" claim even after having the full story, and I don't believe either of them has retracted the claim that this issue is relevant to the network neutrality debate.

Craig Newmark complains that he didn't get good responsiveness from Authentium, which Authentium disputes, but he has indicated satisfaction with Cox.

The story has been picked up by George Ou at ZDNet (here and here) and by Glenn Harlan Reynolds at Instapundit (here, here, and here).

This issue was a user software application issue that had no more to do with network neutrality than a browser incompatibility issue, a webserver disk failure, or a fiber cut. Each of these things can prevent a user from reaching some specific content, but none is imposed by the network provider or remedied by act of Congress or the FCC. Those who continue to treat it otherwise even after knowing the details are demonstrating questionable judgment and integrity.

UPDATE: Craig Newmark has now stated that there was no deliberate blocking here and the Authentium explanation is correct. I've exchanged a few emails with him asking whether the behavior of the Craigslist.org webserver is specifically intended to regulate the rate of new HTTP connections (and whether the behavior is coming from something like an application-layer switch negotiating the TCP handshake); he said he's passed that on to his technical team and I'll report here if I get confirmation or refutation on that point.

One puzzling paragraph of his latest blog post is this one:

One good outcome of this is that we flushed out a swiftboater (in the generic sense), and this helps me understand the way disinformation gangs operate. Unfortunately, in some blogs, a good guy has been linked with the swiftboater, which isn't fair, and hopefully, we can do something about that.

I'm not sure who he's calling a swiftboater, who he's calling a good guy, and who he's calling a disinformation gang. So far as I can see, the disinformation gang in this incident has been the "Save the Internet" crowd, who still have yet to admit the clear facts of the matter. I asked for clarification, but Craig declined to identify who he's referring to (except that he's not referring to Matt Stoller or Timothy Karr).

UPDATE: July 12, 2006: The Craigslist.org webserver has changed its behavior and no longer sends a SYN-ACK packet with a window size of 0; it now gives a window size of 4380. This change by Craigslist.org works as a fix to the Authentium issue. I wonder why they only made the change now.

New indecency fines signed into law

Bush has signed the legislation raising fines on broadcast "indecency." Adam Thierer gives the scorecard for First Amendment protections on various forms of media:

MEDIA PLATFORM / FIRST AMENDMENT STATUS
Newspapers = Full First Amendment protection
Magazine = Full First Amendment protection
Cable TV = Full First Amendment protection
Satellite TV = Full First Amendment protection
Movies = Full First Amendment protection
DVDs = Full First Amendment protection
CDs = Full First Amendment protection
Satellite Radio = Full First Amendment protection
Internet = Full First Amendment protection
Blogging = Full First Amendment protection
i-Pods = Full First Amendment protection
Podcasts = Full First Amendment protection
Video Games = Full First Amendment protection

… and then…

Broadcast TV & Radio = Second Class Citizenship Rights in Terms of the First Amendment

It's high time to remove the FCC's ability to regulate content on the grounds that somebody might find it offensive--it has become increasingly irrelevant. (Actually, I think Peter Huber makes a strong case for doing away with the FCC completely.)

Rep. Fred Upton (R-MI), chairman of the House Telecommunications Subcommittee, would like to go the other direction, and give the FTC the power to regulate video games for content.

The New Republic supports net neutrality, based on error

The New Republic's editors have come out in favor of net neutrality. As is all-too-common, their reasoning is based, at least in part, on a factual error:

Under the original rules put in place in 1934, telecommunications companies can't give preferential treatment to one set of outgoing calls over another by, say, offering static-free calling to one company's telemarketers but not another's. The same rules initially applied to the Internet. Telecom companies couldn't charge website proprietors to have their content sent to consumers more expeditiously. But, last August, George W. Bush's Federal Communications Commission (FCC) exempted telecoms that provide Internet connections from these restrictions, dealing a blow to both entrepreneurship and political discourse.

I've italicized the false statement. TNR has, like many others, wrongly inferred that rules which applied solely to telco telephony and last-mile networks have also applied to the Internet and Internet Service Providers, when in fact ISPs and backbone providers have been under no such constraints.

If net neutrality proposals were limited to maintaining Title II requirements for unbundling and interconnection for common carriers (which is part of the REFORM proposal advocated by Global Crossing, which includes other points which are far more important than net neutrality for fostering competition in telecommunications), or even adding cable providers into that category, I might support them.

UPDATE: I should point out that some Internet backbones have been or are owned by entities which are common carriers in virtue of the fact that they have owned and operated long-distance telephone networks. This includes MCI, Sprint, and Global Crossing (more accurately, Global Crossing Telecommunications, Inc.). However, the FCC has always held that common carriage requirements do not apply to Internet interconnection.

Eli M. Noam's 1994 paper, "Beyond Liberalization II: The Impending Doom of Common Carriage," appears to have been rather prescient. He argues that common carriage is not sustainable in a competitive environment, and looks at possible hybrid approaches that mix common carriage and contract carriage (I kind of like his "common carrier rights of way" approach, which advocates of open source will find similar to the GPL). He regretfully concludes that common carriage will go away and that the hybrid approaches are not sustainable.

CBS protests $3.3 million FCC fine against "Without a Trace"

The FCC levied a record-breaking $3.3 million fine against 103 CBS affiliates for airing a repeat episode of "Without a Trace" on December 31, 2004, before 10 p.m. which involved "a simulated group sex scene at a high school party." CBS has protested on the grounds that all 4,211 complaints were submitted via the Parents Television Council and American Family Affiliation websites, and only two complaints referred to actually seeing the offending scene.

(Remember, the FCC is the organization net neutrality advocates want to give the power to regulate content. The power to mandate content will no doubt bring along the power to prohibit content.)

Adler on federal environmental regulation

At the Skeptics Society conference on "The Environmental Wars," Jonathan Adler gave a talk on "Fables of Federal Environmental Regulation." Adler's talk made several points, the main ones among them being:

* Federal regulations tend to come late to the game, after state and local regulations or private actions have already begun addressing the problems. The recurring pattern is that there is an initial recognition of a problem, there's state and local regulation and private action to address it, and then there's federalization. I can add to Adler's examples the development of the cellular telephone industry, where private actors stepped in to allocate licenses through the "Big Monopoly Game" (a story told in the book Wireless Nation) when the FCC proved incompetent to do so itself; federal anti-spam legislation, which came only after many states passed anti-spam laws; and federal law to require notification of customers whose personal information has been exposed by system compromise (which still doesn't exist, though almost half the states now have some kind of hacking notification law). (In a related point, industries regularly develop products that completely sidestep federal regulations, such as the SUV, interstate banking, credit cards, money market accounts, and discount brokerages. The development of the latter financial products is a story told in Joseph Nocera's A Piece of the Action: How the Middle Class Joined the Money Class.)

* The causes of federal regulations are not necessarily the problems themselves, but are often rent-seeking by involved entities, which can create a barrier to other alternative solutions. Adler listed four causes of federal environmental regulations: increased environmental awareness (by the voters and the feds), increasingly nationalized politics (political action at a national level), distrust of states and federalism, and rent-seeking. He gave examples to illustrate.

* We don't see (I'd say "we tend not to see") environmental problems where we have well-defined property rights; the environmental problems occur in the commons (cf. Garrett Hardin's "The Tragedy of the Commons"). I disagree with making this an absolute statement since there are bad actors who disregard even well-established property rights (or liability rules).

Adler's intent was to raise skepticism about federal regulation on environmental matters on the basis of several points:

* History shows the problem already being addressed effectively in a more decentralized manner.
* Federal regulation tends to preempt state regulation, creating a uniform approach that doesn't allow us the benefits of seeing how different approaches might work--we can miss out on better ways of dealing with the issue.
* The rent-seeking behavior can produce unintended consequences that can make things worse or impose other costs.

While I'm not sure I agree with the implied conclusion that federal regulation is never helpful, I agree that these are good reasons to be skeptical.

The preemption issue in particular is a big one. The federal anti-spam law, CAN-SPAM, was pushed through after years of failure to pass federal regulations against spam after California passed a tough mandatory opt-in law. The federal law was passed largely through efforts by Microsoft and AOL (whose lawyers helped write it) and preempted state laws which mandated opt-in or any requirements contrary to the federal law. I don't think it's cynical to believe that preventing the California law from taking effect--which would potentially have affected online marketing efforts by Microsoft and AOL--was a major cause of the federal legislation passing.

The benefit of preemption is that it creates a level playing field across the entire nation, which reduces the costs of compliance for those who operate across multiple states. But it also reduces the likelihood of innovation in law through experimentation with different approaches, and reduces the advantages of local entities in competition with multi-state entities. It also prevents a state with more stringent requirements from affecting the behavior of a multi-state provider operating in that state, when the requirements get dropped to a federal lowest common denominator. As regulation almost always has unintended consequences, a diversity of approaches provides a way to discover those consequences and make more informed choices.

Another issue is that many federal regulations provide little in the way of enforcement, and the more federal regulations are created, the less likely that any particular one will have enforcement resources devoted to it. If you look at the FCC's enforcement of laws against illegal telemarketing activity (such as the prohibition on prerecorded solicitations to residential telephones, and the prohibition on telemarketing to cell phones), it's virtually nonexistent. They occasionally issue a citation, and very rarely issue fines to telemarketers who are blatantly violating the law on a daily basis. In this particular case, the law creates a private right of action so that the recipient of such an illegal call can file a civil case, and this model is one I'd like to endorse. I've personally had far more effect on most of the specific telemarketers who have made illegal calls to my residence than the FCC has. Federal laws and regulations can be effective when they are applicable to a small number of large players who can be adequately policed by a federal agency (but in such cases those large players tend to also be large players in Washington, D.C., and have huge influence over what rules get set) or when the enforcement is pushed down to state, local, or even private levels (e.g., using property or liability rules rather than agency-based regulation). Otherwise, they tend to be largely symbolic, with enforcement actions only occurring against major offenders while most violations are left unpunished.

The most effective solutions are those which place the incentives on involved parties to voluntarily come to agreements that address the issues, and I think these are possible in most circumstances with the appropriate set of property and liability rules. A good discussion of this subject may be found in David Friedman's book, Law's Order: What Economics Has to Do With Law and Why It Matters.

There seems to be a widespread illusion on the part of many people that many problems can be solved merely by passing the federal legislation, without regard for the actual empirical consequences of such legislation (or the actual process of how it's determined what gets put into such legislation!). From intellectual property law, to environmental law, to telecommunications law (e.g., net neutrality), good intentions can easily lead to bad consequences by those who don't concern themselves with such details. Friedman's book is a good start as an antidote to such thinking.

Net Neutrality Index

This post serves as an index to the net neutrality posts on The Lippard Blog. I'll update this post with any future posts on the subject.

"Net Neutrality" (February 12, 2006) Critique of Bill Thompson's argument for net neutrality.

"Geddes on net neutrality" (February 14, 2006) Comment on and link to good Martin Geddes blog post on net neutrality.

"Commoncause.org: Spamming for 'net neutrality'" (March 9, 2006) How Common Cause deluged Mark Cuban with spam after depicting him with devil horns for not backing net neutrality.

"Talking Points Memo gets it completely wrong on COPE Act" (April 22, 2006) Critique of Josh Marshall and Art Brodsky's bogus claim that the bill transfers control of the Internet to the telcos (who have a much smaller percentage of consumer Internet customers in the U.S. than the cable companies).

"Misinformation in defense of net neutrality" (May 7, 2006) Critique of Adam Green and Matt Stoller who repeat the common misconception that common carriage requirements have applied to the Internet, which is the basis of their calling Mike McCurry a liar.

"Net Neutrality and Last-Mile Connectivity: An Analogy" (May 8, 2006) An analogy about net neutrality and last-mile connectivity in terms of taxicabs, in an attempt to elucidate some of the major points and misconceptions.

"Net Neutrality and the Pace of Innovation" (May 17, 2006) A look at the pace of innovation in the Bell System under monopoly in light of calls for nationalization of "the Internet backbone" (as though there is one such thing) by net neutrality advocates.

"Misinformation from 'Save the Internet'" (May 19, 2006) A critique of "Save the Internet"'s critique of the "Hands Off the Internet" flash animation cartoon, which seems to repeat the common confusion that common carriage requirements have applied to the Internet.

"Bad unintended consequences of HR 5417" (May 19, 2006) A criticism of the Sensenbrenner net neutrality bill.

"Yglesias on McCurry" (May 19, 2006) Critique of Matthew Yglesias on net neutrality guest blogging at Talking Points Memo.

"Net Neutrality and Fair Use" (May 22, 2006) Disagreement with Larry Lessig about an analogy between net neutrality and fair use. (I tend to agree with Lessig on intellectual property issues, at least about the dangers of ever-extending copyright terms, lack of registration requirements, and DRM.)

"Hillary Clinton and Net Neutrality" (May 23, 2006) The hypocrisy of Hillary Clinton's support of net neutrality on the grounds of protecting free speech (as pointed out by Adam Thierer).

"Consumer broadband last-mile competition in the Phoenix metropolitan area" (May 24, 2006) A summary of actual broadband options in the Phoenix area, listing eight separate providers.

"Net Neutrality expands to absurdity" (May 24, 2006) Critique of net neutrality advocate Jim Durbin, who thinks corporate web filters are a violation (which presumably he thinks should be made illegal). Also comment on Glenn Harlan Reynolds on pirate WiFi in the enterprise.

"Newmark vs. McCurry on net neutrality" (May 24, 2006) Comment on Craig Newmark's debate with Mike McCurry in the Wall Street Journal, in which Newmark is mightily confused about the technical facts.

"Dave Siegel on QoS and net neutrality" (May 26, 2006) Link to Dave Siegel blog post that summarizes how QoS is used in Global Crossing's network, and to a presentation by Xiao Xipeng on the same topic.

"Save the Internet: Fighting astroturf with astroturf" (May 26, 2006) How "Save the Internet" has generated astroturfed letters-to-the-editor while condemning astroturf from the telcos. I condemn both.

"More on last-mile options in Phoenix" (May 27, 2006) A response to criticisms of my list Phoenix-area broadband options from Douglas Ross.

"The Abstract Factory on net neutrality" (May 31, 2006) A link to a good commentary on net neutrality and astroturfing telco shills.

"Kevin Drum gets it wrong on net neutrality and common carriage" (June 1, 2006) Kevin Drum repeats the common misconception that common carriage requirements have applied to the Internet.

"Worst net neutrality analogy ever?" (June 1, 2006) A critique of Susan Crawford's horrible sidewalk analogy.

"George Ou explains QoS to Russell Shaw" (June 10, 2006) In a ZDnet debate, George Ou gives a good simple explanation of QoS to someone who wants to regulate something he doesn't understand.

"Martin Geddes on net neutrality, federalism, and U.S. vs. EU" (June 12, 2006) Link to a nice piece on Geddes' Telepocalypse blog where he provides links to his past positions on network neutrality and compares the U.S. to EU, and their respective regulatory regimes to networks.

"Verizon's Thomas Tauke on net neutrality" (June 12, 2006) Quote from and link to a Declan McCullagh interview with Thomas Tauke of Verizon about net neutrality.

"Bennett on Free Press net neutrality 'facts'" (June 12, 2006) Richard Bennett shows that the Free Press's network neutrality facts are mostly fiction, argues against the anti-QoS provision of Snowe-Dorgan and Markey in a note to Sen. Boxer, comments on tomorrow's Senate hearing, and on Matt Stoller's acting as a spokesman for admitted ignorance.

"'Hands Off the Internet' writes about me, then thinks better of it" (June 15, 2006) A post from the HOTI blog about me, recovered from Google cache. (Most of the content is actually excerpted from my own blog, with a bit of HOTI commentary.)

"The New Republic supports net neutrality, based on error" (June 15, 2006) The editors of The New Republic join the crowds of net neutrality supporters who incorrectly think that common carriage requirements have applied to ISPs and the Internet.

"Douglas Ross's Network Neutrality Index" (June 16, 2006) A link to an index of blog posts by an advocate of net neutrality regulation.

"Demonization of adversaries is wrong, Matt Stoller" (June 16, 2006) A criticism of part of Matt Stoller's presentation at YearlyKos.

"Andrew Kantor changes his mind on net neutrality" (June 16, 2006) The USA Today technology columnist no longer supports net neutrality regulations.

"Matt Stoller lies about site blocking" (June 18, 2006) Matt Stoller falsely attributes a problem between Craigslist.org and Cox's PC firewall software to the kind of discriminatory site blocking he thinks net neutrality regulations are needed to prevent--after already being informed of the real cause.

"Update on Cox blocking of Craigslist" (June 20, 2006) Update on who's said what, and a bit more detail on the underlying problem in which I disagree with placing blame on Craigslist.

"Content providers and ISPs: who really has the stronger hand?" (June 21, 2006) A look at a case of "reverse network neutrality" involving ESPN360 blocking access to ISPs.

"The future of connectivity options" (June 22, 2006) Telco 2.0 looks at a variety of business models for different types of connectivity and projections for how they will change in significance over the next decade. It would be a bad idea to impose regulations which stifle innovation by prohibiting some business models.

"Matt Stoller refuses to come clean" (June 22, 2006) Matt Stoller, caught in falsehood, tries to avoid responsibility for his statements and instead accuses others of being "lying liars."

"A version of network neutrality I can endorse" (June 22, 2006) I attempt to put forth a minimal, non-FCC-regulated version of "Lippard Network Neutrality" that I think is reasonable, and explain how it differs from what many network neutrality advocates are supporting.

"Craigslist no longer uses TCP window size of 0" (July 14, 2006) Update on the Craigslist/Cox issue.

"VoIP quality degradation shows need for prioritization" (July 27, 2006) Brix Networks study shows quality of VoIP calls has declined over the last 18 months due to competition for network resources.

"ACLU incompetence and misinformation on net neutrality" (November 3, 2006) The ACLU comes out in support of network neutrality, making many of the same erroneous arguments which have been debunked here before, such as confusing common carriage with IP-layer nondiscrimination.

"Netroots and telecom" (July 19, 2008) Discussion about the description of the Netroots Nation "Big Telecom" panel and an Art Brodsky column about it.

"New Markey/Eshoo net neutrality bill" (August 3, 2009) Brief comments on the Internet Freedom Preservation Act of 2009.