Consumer broadband last-mile competition in the Phoenix metropolitan area

Net neutrality advocates claim that telcos (meaning the local telco providers) have a "virtual monopoly" on consumer broadband, or that they have a duopoly with the cable companies. In many regions, this is true, or nearly so (thus the "virtual" qualifier). (Note, however, that the statement becomes transparently false if it's not restricted to consumer broadband. There are far more options for Internet service for businesses, especially businesses that can put equipment into colo facilities.)

But if you look at the metropolitan Phoenix area, there are quite a few competing consumer broadband providers, e.g.:

* Qwest, the Regional Bell Operating Company formerly known as U.S. West, provides DSL services (as well as higher bandwidth wired connections from fractional T1 and up, and I think they still offer ISDN). This is one of the evil telcos that is enemy number one for many net neutrality advocates.
* Covad, a DSL provider that uses Qwest's last-mile network in Phoenix. In 2003 Covad acquired all of Qwest's business DSL customers, and it appears that they will or have exited the consumer broadband market--however, they can provide business-class DSL service to my residence (which is interesting because Qwest says they can't). Covad is also actively pursuing WiBro (wireless broadband, a Korean standard) and WiMax (wireless broadband, an Intel standard that will now be compatible with WiBro).
* Cox Communications, a cable company, provides cable modem services. (They also have higher speed connections for businesses.) Cox has done very well in recent years in taking away customers from Qwest for voice telephone services, as well as out-competing Qwest's DSL offering for consumer Internet access. I currently use Cox Business Services to my home.
* Cable America, a competing cable company, provides cable modem services in parts of the east Valley. (UPDATE May 27, 2006: As Douglas Ross (directorblue) has pointed out, Cox entered into an agreement to acquire Cable America in January 2006, so this doesn't really count as an independent broadband provider.)
* Sprint Broadband, a long distance and wireless provider, offers a point-to-point wireless broadband service (previously People's Choice, which Sprint acquired). Sprint also offers EV-DO mobile wireless service.
* Alltel, a wireless provider, offers EV-DO mobile wireless service (which is actually using Sprint's EV-DO network).
* Verizon Wireless, a wireless provider, offers EV-DO (3G) mobile wireless service.
* HughesNet, a satellite-based wireless provider (previously DirecWay, and DirecPC before that), offers satellite connectivity (with high latency as a drawback imposed by the laws of physics).
* City of Tempe municipal wireless service, provided and managed by NeoReach. Similar service is being deployed to the City of Chandler, also by NeoReach.

There are no doubt others I've missed--if you're willing to pay for business service, many providers can get that service to your home, which includes services like a T1 connection (where your provider, if not Qwest, will have to pay monthly local loop charges to Qwest and pass that along in your bill) and may include other sources of wireless service. When I had a Global Crossing T1 to my home, the local loop costs were slightly over $200/mo--consumer broadband, by contrast, costs substantially less for more bandwidth, at least in the downstream direction, when delivered to a residence. On the other hand, bandwidth costs in a colo facility can be as low as $10/Mbit/mo, in quantity, i.e., $1000/mo for a 100Mbps Ethernet port. You pay more per Mbit to get data to your residence because of the costs of getting the data out to all those residences and the overhead of dealing with a lot more customers whose individual bills are much smaller than those of a business, and who, on the average, need a lot more hand-holding and support.

Salt River Project, a power generation and transmission company (and a water delivery/irrigation company) that operates in Phoenix, also has about 1,000 route-miles of fiber throughout the city. It resells its excess capacity to businesses (including Qwest) from the entity SRP Telecom. I don't know if they would ever consider using their network to provide consumer services themselves, but there's clearly the potential for a consumer broadband provider to purchase capacity on their network in order to move data around the city.

In Phoenix, if one provider decided to start blocking access to or degrading certain kinds of services that their customers want, there are multiple alternative options. Any provider that engaged in such behavior would see an increase in churn, to the benefit of its competition.

UPDATE (May 27, 2006): Douglas Ross (directorblue) has called this list "bogus" and claimed that only two of the options (Qwest and Cox) actually count. He dismisses Covad because it uses Qwest last-mile wires, but goes on to say, inconsistently, that he would count other cable resellers if the Brand X decision had gone the other way and providers like Cox were forced to enter into relationships like Covad has with Qwest. My observation is that if those reseller relationships exist and the reseller provides access to its own Internet network, then that is enough to foster a competitive environment. It doesn't matter whether it's government-mandated, it matters whether it exists. Doug rejects all the wireless options out of hand on the grounds of Verizon's EVDO terms-of-service. (His section about why WiMax isn't viable doesn't actually discuss WiMax at all, only EVDO terms-of-service.) He misses the point that Sprint Broadband and Sprint EVDO are *two different services*--he doesn't actually give a reason to reject Sprint Broadband. He says he doesn't understand why I put the City of Tempe's municipal WiFi network in the list--I did so because Tempe is right in the middle of the Phoenix metropolitan area (and noted Chandler's metro WiFi in-development, which is just south of Tempe, for the same reason). These are real options for people moving to the Phoenix area and for anyone who is willing to move to get different broadband service. (And certainly broadband options in an area are an important factor in choosing a place to live.) Finally, he rejects HughesNet because it is unsuitable for VOIP or P2P. At least he doesn't say that HughesNet should be mandated to change the laws of physics in order to provide those services under net neutrality.

Doug's position on net neutrality appears to be that nothing counts as broadband unless it supports every application he wants to use (even though the proposed net neutrality bills count anything as broadband that is greater than 200kbps in one direction--they don't restrict it to wireline services), and that whoever builds an infrastructure capable of supporting what he wants has to provide it to him, without recovering the costs of that infrastructure by charging any third parties. But I bet he also is unwilling to pay an unsubsidized rate to use such a service.

Newmark vs. McCurry on net neutrality

Craig Newmark of Craigslist and Mike McCurry of "Hands Off the Internet" debate "Should the Net Be Neutral?" at the Wall Street Journal. I'm struck by a number of things that Newmark says:

Do you believe Yahoo should be allowed to outbid Google to slow down Google on people's computers? That's the kind of thing that the big guys are proposing.

In fact, nobody has proposed slowing down anything--the consumer broadband telcos have proposed adding new, higher-bandwidth physical circuits (fiber to the home) which contain virtual circuits dedicated to content with requirements for higher bandwidth and low latency and jitter, for which the primary application they have in mind is IP television. And they want to charge content providers to use those virtual circuits. Now, one can argue that dedicating bandwidth to new applications that content providers have to pay for will have a future consequence that Internet bandwidth will be consumed and not upgraded, leading to degradation for best-effort Internet services, but that requires argument to support the likelihood of that outcome in the face of competition from cable companies and wireless providers.

With all that empty fiber, bandwidth is not an issue. A bigger issue is that we're running out of [Internet protocol] addresses. The new net protocols, IPv6, address that, but the big telecoms are already very late implementing that. (Hey, I'm an engineer, and their engineers talk to me.)

Newmark is confusing Internet backbone bandwidth with last-mile consumer broadband bandwidth. I've addressed this confusion at length. BTW, IPv6 is rife with difficulties and not quite ready (or useful) for the average consumer, but my employer, Global Crossing, has been one of the first to make it widely available to its customers. (I run IPv6 on my home network via a tunnel to Global Crossing.)

No one's talking about "government lawyers and regulators engineer[ing] the future of the Internet," except, well, you, Mike. We're trying to prevent that, and trying to get Congress to maintain the level playing field we have right now, that the FCC just tried to ruin. We're just asking everyone to play fair.
...
I'm being completely straight: no one's interested in regulation in the sense you're thinking, we just want the existing level playing field to continue… Beyond that, we're not interested in mandating performance criteria, none of that stuff.
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What we're looking for is just fairness, a level playing field, no regulation or stuff like that. In America we believe that if you play fair and work hard, you get ahead. We don't want the government to give special privileges to the big guys, particularly not at the expense of small business and consumers. We don't want more regulation and we don't need lawyers involved where the free market functions well. I guess we're for capitalism.

Here, Newmark is simply failing to recognize what's in the actual network neutrality bills in Congress, which have unintended consequences about how networks are engineered, what can be in acceptable use policies, what kinds of contracts network providers are permitted to enter into with their customers, and how they can charge for access to different services--rules that to date have not existed for Internet services.

Today, many Internet providers have acceptable use policies that prohibit spam, going beyond the requirements of the relatively weak federal CAN-SPAM law. Under all of the net neutrality bills I've seen, providers must permit customers to send or receive any "lawful content," which forces them to reduce their AUPs to the lowest common denominator of whatever is prohibited by law in the jurisdictions where they provide service. These bills prohibit providers in the United States from setting the conditions of contract with their customers regarding activities they consider abusive which are not codified in law. The "pink contract" would thus become a government mandate.

UPDATE: FCC Commissioner Michael Copps and U.S. Supreme Court Justice Clarence Thomas back up McCurry's statement in this debate that the FCC already has authority under Title I to prevent anti-competitive discrimination without the need for new statutory powers from Congress.

McCurry at the WSJ:

And doesn't the FCC have authority already (under Title I) to step in and act if necessary?

Copps:

The Federal Communications Commission has authority under current law to ensure that broadband-access providers -- currently mainly cable and phone companies -- do not discriminate against Web-based providers of content, search services and applications, FCC commissioner Michael Copps said Tuesday.

Thomas:

“The [FCC] remains free to impose special regulatory duties on facilities-based [Internet-service providers] under its Title I ancillary jurisdiction,” Justice Clarence Thomas wrote in National Cable & Telecommunications Association vs. Brand X Internet Services.

This means net neutrality advocates who support the bills in Congress don't think this is enough, and owe an explanation of specifically what powers they want to add to the FCC, what rules they want the FCC to make, and how those rules will be enforced.

"Net Neutrality" expands to absurdity

Jim Durbin writes that he supports net neutrality because of fears about companies blocking access to certain websites at the enterprise. In his opinion, apparently, net neutrality not only means that ISPs can't block access to lawful content, neither can employers. No net neutrality bills would take away the ability of enterprises to restrict corporate Internet access to business-related content and use products like web proxies, but it's a symptom of the fuzziness of "net neutrality" that Mr. Durbin thinks this is a reason to advocate it. What's next, a claim that the use of firewalls is contrary to net neutrality principles?

Durbin approvingly links to an article by Glenn Harlan Reynolds about employees using pirate WiFi or resorting to bringing in personal equipment with EVDO cards in order to get their Internet or blogging fix at the workplace. Reynolds and Durbin both seem to think that companies should have no right--or at least no ability--to ban such things from the workplace unless they have "big trade-secret issues" or involve national security. Now, there's a big distinction between pirate WiFi (connecting an unauthorized device to a company's internal network, most likely exposing its internals to the outside world) and using your own equipment over a wireless connection to a provider that you pay for yourself. In the former case, it's making unauthorized changes to the company's own network and security mechanisms, while in the latter the issue is more an issue of whether you're doing the job you're being paid to do. But none of this should have anything to do with the "net neutrality" debate.

Hillary Clinton and Net Neutrality

Adam Thierer of the Cato Institute expresses his bafflement over why people have such faith that instituting government regulations to enforce net neutrality will result in beneficial protection for free speech, when historically Congress has shown little support for the principle. He points out the irony of Hillary Clinton calling for net neutrality in the name of protecting free speech, when she has on multiple occasions called for and supported government restrictions on free speech, including on the Internet. She supported the Communications Decency Act, most of which was overturned by the U.S. Supreme Court as unconstitutional. She supports regulation of video game content. She pushed the V-chip.

Does anyone really believe that the regulated Internet Hillary Clinton wants to see won't ultimately result in any new restrictions on freedom of speech? Especially since the net neutrality bills propose giving regulatory authority over the Internet to the FCC, the same agency that is more aggressive at fining broadcasters for "indecent" content than addressing telemarketing fraud?

David Siegel, Global Crossing: telco blog pioneer

Martin Geddes has interviewed my co-worker Dave Siegel, and the results are up at his blog, Telepocalypse.

Botnet interview on the Security Catalyst podcast

I did an interview over the weekend with Michael Santarcangelo of the Security Catalyst about botnets. Part I of that interview is available now as a podcast (you can subscribe via Yahoo or iTunes).

UPDATE: Part two is here.

Bush administration on NSA suit: Courts have no right to address the issue

Ed Brayton points out a paragraph from an AP story that says:

The Bush administration has urged a judge to dismiss a similar case, saying it threatens to divulge state secrets and jeopardize national security. The government argued in briefs that the courts cannot decide the constitutionality of the president's asserted wartime powers to eavesdrop on Americans without warrants.

As Ed observes,

If the courts cannot decide the constitutionality of such programs, then we might as well not have a constitution or courts at all.

Net Neutrality and Fair Use

Larry Lessig has posted an interesting blog article comparing net neutrality to fair use, and asking whether there's a problem in consistency on the part of those who favor one but not the other. As someone who more strongly supports laws recognizing fair use than regulated net neutrality, I agree with the reasons given by several of the posters (including Kevin Farnham, Jeremy, Cory Doctorow, three blind mice, and poptones). It seems that some of the better reasons to question creating a regulatory regime for net neutrality are present in these comments--I'm pleasantly surprised to see that the comments appear to be dominated by net neutrality skeptics.

Some of the highlights:

* Fair use is a limitation on rights pertaining to intellectual property, while net neutrality is a limitation on rights pertaining to physical property--Lessig's own excellent book Free Culture points out that intellectual or creative property is different from physical property in significant ways.
* The burden of proof on a fair use claim is on the person claiming fair use, not the copyright owner; in net neutrality the burden is on the property owner.
* Fair use is really a limitation on a government regulation (copyright), while net neutrality is a regulation that's a limit on business models, contracts, and technology.
* Net neutrality advocates have not been clear about what they would require and prohibit, how violations will be detected/measured, and what the enforcement mechanisms will be. (I don't trust Congress to tell network engineers how to do their jobs.)

Dirty Politician: William Jefferson

Rep. William Jefferson (D-LA)'s Washington office was raided last night, and the FBI has disclosed portions of recorded conversations last year between Jefferson and an informant. The informant had paid Jefferson $100,000 in $100 bills (caught on videotape by the FBI) to be delivered to an official in Nigeria. In a telephone conversation on August 1 which the FBI has partially disclosed, Jefferson and the informant spoke to each other in code about the bribe money, which was recovered from Jefferson's freezer during a police search on August 3. In that conversation, the informant asked about the status of "the package." Jefferson replied that "I gave him the African art that you gave me and he was very pleased."

Jefferson apparently had the objective of getting work in Africa for a communications company, and getting his children a cut of that deal.

Via Talking Points Memo.

Yglesias on McCurry

Matthew Yglesias, covering for Joshua Micah Marshall at Talking Points Memo, writes of Mike McCurry's battle with bloggers over net neutrality:

People disagreed with McCurry about the net neutrality issue because people disagree about issues. People got so mad at him precisely because of this kind of patronizing attitude. He was peddling flimsy arguments as if it never occurred to him that the blogosphere is full of people who know a lot about the internet and could handle a grown-up argument (see a non-flimsy, though ultimately unpersuasive, anti-neutrality piece if you're interested).

One of the most neglected aspects of the blogosphere, in my opinion, is that precisely because it's (mostly) composed of people who aren't professional journalists, it's composed of people who are professional doers of something else and know a great deal about what it is they "really" do. Consequently, the overall network of blogs contains a great deal of embedded knowledge. The consensus that emerges from that process can, of course, be mistaken but even though the most prominent people expressing that consensus may not be experts in the subject at hand (the most prominent bloggers tend to be generalists), the consensus will almost always be grounded in some kind of well-informed opinions. If you want to push back on that, in other words, you'd better know what you're talking about and not treat your audience like a pack of mewling children.

While I agree that McCurry was occasionally patronizing in what he posted, at least he hasn't gotten his facts as wrong as Matt Stoller at MyDD, Adam Green at the Huffington Post, the "Save the Internet" Coalition, or Art Brodsky at Talking Points Memo. These guys don't know the difference between net neutrality and common carriage, don't understand who or what common carriage applies to, don't understand how or why network service providers interconnect, don't understand the utility and current uses by providers of QoS, don't understand the unintended negative consequences of bills like HR 5417, and have a naive faith that the FCC will act only as a force for freedom and goodness.

The fact is that most of the material being posted by bloggers in favor of net neutrality regulation is by people who are not experts in how the Internet works--while there are certainly advocates of net neutrality among those who operate Internet networks (and I myself am supportive, with qualifications, of the four principles in the FCC policy statement), my perception is that most of them favor keeping government out of it as much as possible and agree with the additional six principles advocated by McCurry's organization, "Hands Off the Internet."