bills in Congress would deregulate the Internet, but may allow
service providers to control content
D. Rockefeller realized that the way to control the oil market
was to control the transport of oil. So in 1871, he colluded
with the railroad industry to form a cartel called the South
Improvement Company. The rate to ship oil doubled, but Rockefeller’s
Standard Oil Company would get rebates for every gallon of
oil shipped, even those shipped by his competitors. South
would also collect information on the destinations, costs
and dates of competitors’ oil shipments.
Once word leaked, independent oil producers revolted and managed
to stop South before it shipped a single gallon. But to a
great extent, the damage had been done. Rockefeller offered
to buy out his competitors, showing them his books so they’d
know what they were up against. They had a choice: Sell out
now, or be run into the ground. Standard Oil went on to control
the production of oil throughout the United States until the
Supreme Court broke it up in 1911.
What does a 19th-century oil monopolist have to do with the
modern-day world of ones and zeroes? Well, we all know how
nicely things work out when oil men are in charge. But the
real key is the railroad—the transport route, the superhighway.
It’s more than a stale metaphor for talking about the abstract
technicalities of the Internet. The way valuable goods are
delivered—be they gallons of oil or binary packets—hasn’t
changed much. When the invention of radio and telephones spurred
Congress to regulate communications, legislators used transportation
law as a model. Now, as Congress is working on its first major
telecommunications bill since 1996, telecom and cable companies
are floating the idea of a preferred status for content providers
who are willing to pay for fast downloads, with slower service
for everyone else—an Information Super-Tollway.
By now, you’ve probably gotten an e-mail or read a blog post
about the issue of network neutrality. The term doesn’t tell
you much. (As Arianna Huffington recently observed on her
blog, HuffingtonPost.com, “Why are the bad guys so much better
at naming things? Especially legislation.”) It’s a term created
by geeks, and it refers to the concept of keeping content
separate from the operation of networks. Internet equality
might be more evocative in the political arena. In any case,
the concept has been essential to the Internet since it was
The Telecom Act of 1996 deregulated the communications industry,
bringing about widespread media consolidation. It opened the
door for Clear Channel’s acquisition of hundreds of radio
stations. It allowed phone and cable companies to consume
one another ravenously, undoing many decades’ worth of anti-trust
measures. From a public interest point of view, the law has
been a disaster. It’s also out of date: The Internet is mentioned
fewer than a dozen times.
Last week, the U.S. House of Representatives passed the Communications
Opportunity, Promotion and Enhancement Act of 2006. The COPE
Act covers a lot of ground. It overturns state laws that prevent
cities from setting up their own community Internet services,
which is good. It also establishes a national video-franchise
system to allow telephone and cable companies to offer broadband
TV service without having to make the local agreements the
cable companies currently have; thanks to public outcry, the
bill also ensures some funding for public access programming.
Most significantly, the COPE Act and its Senate equivalent,
the Communications, Consumer’s Choice and Broadband Deployment
Act (a monster-sized bill introduced by Sen. Ted Stevens of
Alaska), would deregulate the Internet in exactly the way
telephone and cable companies want it to. Both pieces of legislation
would allow the telcos to control the ongoing shift to broadband
Internet television by allowing telephone companies to enter
the TV business, and would allow both telephone and cable
companies to offer service only where they want to—i.e., where
they can make the most money—with no obligation to build out
into lower-income neighborhoods, which won’t do anything to
help the digital divide.
Neither the House nor the Senate bill includes net-neutrality
protections, which is why so many public-interest groups oppose
the bills. In the midst of all of this deregulation, Congress
needs to make a clear stand against letting Internet-service
providers filter content. Net neutrality would ensure that
every Web-based business and every site, be it personal, political
or commercial, would be treated the same by the systems that
power the Internet itself.
For a moment, it looked as though Congress was beginning to
get the message that net neutrality could be a winning issue.
In late May a bipartisan bill called the Internet Freedom
and Nondiscrimination Act of 2006 passed the House Judiciary
Committee 20-13. That bill would have an amendment that would
have enshrined net neutrality into U.S. Internet policy by
prohibiting broadband providers from discriminating against
any Web site or online service. A similar bill, the Internet
Freedom Preservation Act, was introduced in the Senate with
But the same day it passed the COPE Act, the House voted down
net neutrality. The battle is half over, and the public is
0 for 1.
Verizon, BellSouth, Time Warner, SBC, Comcast and AT&T—the
main supporters of the new telecom legislation and opponents
of net neutrality—are using Congress to help them gain a competitive
advantage. Collectively they claim 98 percent of the nation’s
Internet customers, but they fear that they’re losing ground
in their other businesses. Internet phone services like Vonage
and Skype offer free-to-incredibly-cheap local and long distance
calling online, and once Internet TV gains a mass audience,
cable TV will be outmoded. Suddenly there’s real competition
in voice and video services, and that’s bad news for companies
like Verizon and Time Warner.
So in order to get their cut from all this newfangled content,
the telcos and cable companies have come up with a “tiered”
system for the Internet similar to that of cable TV (the one
that makes you pay through the nose to watch The Sopranos).
They would charge not only their subscribers but also the
content providers themselves—Google, Yahoo!, iTunes, and every
other site that could afford it—for “super-fast” service.
A news-content site like The New York Times would sign
a high-dollar agreement with an ISP for that fast service,
making its competitors less appealing to the 80 percent of
Americans who get their news online. How slow will rank-and-file
Web sites be in that system? How easy will it be to read the
liberal blogs or download the indie podcasts? That would be
up to the ISPs.
The industry says it needs a tiered system because all those
little video clips people send to each to other are hogging
bandwidth. The next time you see an ad for Time Warner’s Road
Runner broadband service, notice that streaming video is part
of the lure of paying $44.95 a month. An Associated Press
story earlier this week quoted Verizon and BellSouth spokesmen
warning that as the video trend continues, the ’Net could
choke—like an overbooked flight, an ISP would be overcapacity
if all of its subscribers downloaded high-quality video at
the same time. But as the story points out, Internet traffic
doesn’t work that way. It grows along with the capacity, not
ahead of it. We wouldn’t be watching YouTube videos over a
64K modem, because it wouldn’t be worth the aggravation. The
industry says all that innovation will cost money, and that
they will have no choice but to pass that cost on to consumers.
Oh, we consumers would suffer, they warn us, even those of
us who just want to check e-mail. The fact is, ISPs have been
whining about multimedia content since RealAudio first launched
its streaming sounds in 1995. Not only has the ’Net survived,
but ISPs have raked in billions in profits as a result. The
video-franchising piece of the new telecom bills, remember,
would let phone companies set their own terms for launching
nationwide video services.
Public interest groups are afraid that telcos would use their
gatekeeping power to block access to the sites of their competitors
and critics. Poppycock, the telcos say. We would
never do anything like that. The FCC wouldn’t let us get away
with it! And anyway, we wouldn’t want to. We believe in all
this net-neutrality stuff. Cross our hearts. Pinky swear.
No need to make it part of the law, now is there?
And we should believe them why? Remember, AT&T, BellSouth
and Verizon willingly sold the private phone records of American
citizens to the Bush administration’s illegal domestic spying
At the very least, it’s no stretch to think they would give
preferential access to their own content. When AOL bought
Time Warner in 2001, it was a delivery system merging with
a content company. Time Warner owns CNN, HBO and a huge movie
library. The ongoing convergence of content and telecom companies
would reach its logical conclusion in offering faster Road
Runner downloads for those sites and channels. Why wouldn’t
the industry go there? They’ll do anything the law allows
to make money. That’s why we need a law.
Not surprisingly, Amazon, Google and every other major content
site don’t want to pay a toll. They’ve joined a coalition
of groups urging Congress to enshrine net neutrality into
law. Like the successful alliance that pushed back on media-ownership
deregulation two years ago, the net-neutrality coalition spans
the political spectrum. It includes not only lefty groups
such as MoveOn and Common Cause, and mainstream groups such
as the American Library Association and Consumers Union, but
also the Christian Coalition, Gun Owners of America, the Parents
Television Council (crusaders for decency laws) and Prof.
Glenn Reynolds, better known as the right-wing blogger Instapundit.
It’s not hard to understand why this issue reaches across
the political spectrum. The Internet has made possible a democratic
discourse that is truly stunning, transforming political organizing
and communication while the mainstream tries harder and harder
to suffocate ideas that don’t follow the standard party lines.
Consider Stephen Colbert’s blistering address at the White
House Correspondents Dinner. Broadcast on CSPAN on a Saturday
night, completely left out of official newspaper accounts
of the event the next morning, it was watched by millions
of people online, thanks to the kind of video streaming that
the telcos say is cramping their style.
Money, of course, trumps ideology, and the growing concern
of the banking industry could ultimately be decisive. The
financial-services companies, as they’re called, are beginning
to wake up to the fact that they, too, would be expected to
pay tolls for the secure high-speed transactions that have
made them loads of money. In a memo recently leaked to the
press, Verizon urged its consultants to talk the banking industry
out of supporting net neutrality. “They are being fed a lot
of cock-and-bull, Chicken Little stories about how the future
of their industry is at stake because another network industry
might have the freedom to price broadband services according
to market demand,” Verizon’s chief congressional lobbyist,
Peter Davidson, said in the memo.
In case the dismissive approach didn’t work, Davidson also
included the hard sell. He warned that the financial services
industry “better not start moaning in the future about a lack
of sophisticated data links they need” if net neutrality becomes
U.S. Rep. Sue Myrick, a Republican from Charlotte, has been
a target of the net-neutrality movement since she voted down
a net-neutrality provision in the House Energy and Commerce
Committee on April 26 and signed on to cosponsor the COPE
Act. Myrick’s phone number is listed on SavetheInternet.com,
which urges people to call and express their displeasure.
Andy Polk, Myrick’s legislative aide, says her office has
been flooded with calls from people who think Congress is
passing laws that will keep them from being able to look at
the Web sites they want to see. He says these people have
what people are concerned about, the FCC has already drafted
principles to deal with,” he says, “which ensure that people
have access to any Internet site that they would like, that
they can’t be blocked by their Internet provider. We fully
support the principles that the FCC has laid out.”
The FCC’s connectivity principles are: 1) Consumers are entitled
to access the lawful Internet content of their choice; 2)
consumers are entitled to run applications and services of
their choice, subject to the needs of law enforcement; 3)
consumers are entitled to connect their choice of legal devices
that do not harm the network; and 4) consumers are entitled
to competition among network providers, application and service
providers, and content providers. Like the airwaves, the broadband
lines are regulated by the FCC because they run along the
public rights of way—those wires and cables are run along
public streets and buried under people’s backyards. ISPs charge
us for the privilege of connecting, but nobody owns the Internet.
But Polk calls net neutrality a “dicey” concept. “The problem
with the current debate is, no one knows what ‘net neutrality’
actually means.” In committee hearings, he says, its proponents
all defined it differently. But in arguing against it, he
gives a pretty good working definition. “It would require
Internet providers to treat all content exactly the same regardless
of how much bandwidth it’s taking up. If we define net neutrality
in this bill, it would be seen by the industry as saying you
have to allow people to see everything they want and take
up as much bandwidth as they want. When industry people see
that, they would raise the cost of providing the Internet
service because they would have to allow everybody to have
equal access to the bandwidth.”
Read the information telcos publish for their investors and
you’ll learn of unlimited bandwidth, a future without limits
created by their technological prowess. But when they’re discussing
net neutrality, suddenly their broadband systems are packed
tighter than sardine cans.
this point in time we’re not sure we need to further regulate
the Internet,” Polk says. “We want to make sure it’s as free
as possible and allow as much creativity and ingenuity as
Incidentally, Myrick received $27,500 in campaign contributions
from telecom PACs in 2004, including $10,000 from SBC, $8,500
from BellSouth and $7,000 from Verizon.
Polk’s point about the FCC has some basis. There has been
only one case in the United States in which an Internet service
provider blocked access to a specific Web site or service.
It happened to be the Mebane, N.C.-based Madison River,
which was fined $15,000 last year by the FCC for blocking
traffic to Vonage, the online phone service. Madison River
had approximately 121,000 residential phone subscribers and
nearly 40,000 broadband Internet subscribers at the time.
Vonage had more than a million. About a month after Vonage
complained to the FCC that Madison River was “port blocking,”
or preventing certain types of Internet traffic from traveling
through its networks, the agency took action.
But the FCC’s principles don’t address the kind of tiered
system the telcos want to create. Nor do they establish clear
methods of enforcement. Vonage was already hugely successful
when it took on Madison River. What happens to the startups?
To Paul Jones, the Vonage v. Madison River case is evidence
of what telcos can and will do if given the chance. “That
really tells the tale of what net neutrality is about,” Jones
says. “It’s about stopping providers from using their near
monopoly of network connections to invisibly prevent you from
connecting to a site, or to strong-arm content providers into
In 1992, Jones launched one of the first Web sites in North
America. He and a team of techies at UNC-Chapel Hill launched
SunSITE, a public archive and information sharing project
funded by grants from Sun Microsystems. As it collaborated
on more academic, corporate and high-tech startup projects,
it changed its name. In 2000, it became ibiblio, a digital
archive and online public library. Ibiblio also nurtures open-source
software projects, many of which are created by UNC students.
Like other online pioneers, Jones feels strongly that making
neutrality law is necessary to preserve everything we love
about the Internet. “The great beauty of the Internet is that
it’s dynamic, it’s constantly in beta, people are constantly
taking risks,” he says, “and the market behaves like a true
market, in which you have many, many choices. There are only
a few players in the home connectivity market and the variety
is out there beyond them.”
It’s absurd for the telcos to complain that content providers
are making their money off the backs of Internet service providers,
Jones says. “It’s kind of like the paving company getting
mad when a truck drives on their work. They’d like to have
a limited monopoly with not much competition and no responsibility.
I want that job, too,” he jokes.
we’re talking about is preserving the ability of the Internet
to continue to be an engine for economic growth by keeping
a diversity of access,” Jones says.
1880, a company named for Alexander Graham Bell undertook
the first nationwide long-distance telephone network. American
Bell’s project spun off into the American Telephone and Telegraph
Company in 1885. It was a regulated monopoly for almost a
century—everybody needed a telephone, and AT&T had the
ear of nearly every customer in the nation. The government
set the rates, and AT&T enjoyed guaranteed profits. But
new technologies changed the arrangement. In 1982, the Department
of Justice ordered AT&T broken up into regional “baby
Bells” in exchange for allowing the company to enter—what
else?—the computer business. Then came massive deregulation
with the Telecom Act of ’96, and the monopoly reemerged. One
of those “baby Bells,” Southwestern Bell Corp., acquired three
others in the 1990s, and in 2005 SBC moved to buy AT&T
(getting full control of Cingular Wireless in the process).
That merged company, called AT&T, will be the largest
provider of both local and long-distance telephone services,
wireless service and DSL Internet access in the United States.
Today, we’re facing another massive deregulation of the telecom
industry, the first one to give century-old monopolists unfair
advantage on the Internet. Industry spin at the moment is
that Congress needs a “cooling-off period” to “study the issue”
of net neutrality. Industry money is funding a heavy-duty
advertising and PR blitz, some of which is conducted by Astroturf—phony
grassroots—organizations such as Hands Off the Internet (“Say
no to government regulation of the Internet”) and Freedom
Works (“Lower Taxes, Less Government, More Freedom”), which
are funded by the telecom companies. They say net-neutrality
legislation will infringe on the free market. The situation
is deeply ironic, because techies are notoriously libertarian,
especially the core group of ’Net founders now urging Congress
to pass net neutrality legislation.
The fact is, the Internet supports the freest market in existence,
and the tiered system would destroy it. Above all, it is this
contradiction the net neutrality movement must get across
to Congress—and the public. Otherwise, we’ll be signing over
American democracy’s greatest asset to modern-day John D.
Morgan is a staff writer and interim arts & entertainment
editor at The Independent Weekly in Raleigh-Durham,
N.C., where this story first appeared.