Net Neutrality 2.0

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Due to pure time constraints I sometimes leave federal broadband issues to other folks. But the practice (or refusal to practice) net neutrality is everywhere this week – starting with Minnesota’s Senator Franken.

The big issue is that Comcast is giving priority to its online video service Xfinity. The NY Times paints a picture of what’s happening in terms that are accessible to most folks…

“If I watch last night’s ‘S.N.L.’ episode on my Xbox through the Hulu app, it eats up about one gigabyte of my cap, but if I watch that same episode through the Xfinity Xbox app, it doesn’t use up my cap at all,” Mr. Hastings wrote on his Facebook page. “In what way is this neutral?”

Earlier this week, Senator Franken sent a letter to the FCC asking them to look at the situation…

The Minnesota Democrat today sent a letter to the Federal Communications Commission and the Department of Justice asking the agencies to take a closer look at a new service Comcast announced in March that will stream Xfinity on-demand content to Microsoft Xbox consoles.

Comcast maintains that their service agreements are in compliance with net neutrality because it relates only to its own network – tranport does not involved the Internet at large…

Comcast’s On Demand service, a service used hundreds of millions of times by our customers every month for the past several years, is indisputably part of our Title VI cable service which is not subject to the FCC’s Open Internet Rules – and we are not aware of anyone who has taken a contrary view. When Comcast streams its own services over the open Internet (including XfinityTV.com or nbc.com), such streaming is subject to Comcast’s broadband Internet data usage standards. But the Xfinity app for the X-Box does not stream content over the open Internet and is also part of our Title VI cable service. As such, it is not subject to the FCC’s open internet rules.

Franken counters…

Still, Franken said in his letter that even if Comcast is not technically in violation of the rules, its intent is to favor its own services over services offered by potential competitors.

The NY Times article explains why this should matter to the average consumer…

Today, 96 percent of Americans have a choice of at most two broadband providers — a cable company and a phone provider. For consumers who desire very high speeds, cable is often the only choice — along with Verizon’s FiOS and AT&T’s U-verse in small pockets of the country. If given free rein, these gatekeepers could determine which services get to drive through the pipes that make up the Internet at what speeds and prices.

The NY Times even offers a solution of sorts – or at least points out in hindsight what they feel was a crucial policy error in the US…

There is little mystery here. About a decade ago, the government forced France Telecom to lease capacity on its wires to rivals for a regulated price, allowing competitors like Iliad to storm in. The United States took a different path: the Telecommunications Act of 1996 had opened the possibility of similar unbundling, but the F.C.C. decided against such action out of concern it would discourage investment in physical infrastructure.

The F.C.C. appears to have made the wrong call. Iliad started piggybacking on France Telecom’s wires, but soon began laying wires of its own. In 2002, the United States had the sixth-highest broadband penetration among all O.E.C.D. countries. Last year it was in 15th place. Of 34 industrialized countries, the United States ranks 17th in terms of average download speeds. Among the 31 countries that have very-high-speed broadband access, the United States is more expensive, trailing only Turkey, Israel and Chile.

So a new chapter on net neutrality begins. Increased access to fiber as a competitive solution may solve some of the problems. But it’s the OECD ranking that has me a little nervous. Are current providers fighting over deck chairs on the Titanic? Are we focusing too much on maintaining the local market status quo and forgetting that we’re not in competition with ourselves anymore – but that the Internet has opened up a world of global competition and we’re no longer leading that pack?