REPOSTED TO TOP OF BLOG from7/21/2005


Your 2008 President

Harold Feld’s Tales of the Sausage Factory: Telecom Act Rewrite This is another attempt to screw over the American consumer. It’s called the Broadband Investment and Consumer Choice Act. authored by Ensign and McCain in the US Senate. It just cropped up here and has no number yet.

First the good news (by one interpretation):

1) Network providers can’t keep subscribers from using competing voice over IP services;

2) Network providers can’t keep subscribers from reaching any lawful content or using any lawful application (sometimes called %u201Cnetwork neutrality%u201D). But there is an exception. A provider can put any limitation in its terms of service. So if your provider reserves the right in its terms of service to mess with your content without alerting you, too bad. Of course, you can always negotiate for a diferent service contract. . . .

3) Network providers have to let you attach any device you want to the network. So you can buy your own fax machine or use Tivo rather than cable’s equivalent service, rather than going back to the days when you could only rent equipment from Ma Bell or Cousin Cable (The %u201CCartephone%u201D principle).

4) Cable networks can’t lock up programming in exclusive contracts to keep rivals from offering competing video services (%u201Cprogram access%u201D and closes the %u201Cterrestrial loophole%u201D). So Comcast would have to let Verizon and others have access to its Philadelphia and New England Sports Network programming. This also applies to video on demand services.

5) Keeps basic “lifeline” service available.

Now the REAL BAD NEWS:

1) Eliminates any state or local control of quality of service or prices. (While cable prices were deregulated in 1996, some states still have telephone rate controls and local governments still set cable quality of service standards).

2) Eliminates any build out requirements or %u201Canti-redlining%u201D provisions. (Most local franchises require cable companies to build out to the entire franchise area, to ensure that %u201Cless profitable customers%u201D to use the industry euphamism for minorities and poor people generally, get service on the same terms as %u201Cprofitable customers.%u201D

3) Eliminates any private right of action against video or telephone providers. Your only recourse is the FCC complaint process, handled by the vestigial state or local authority.

4) Limits FCC authority to regulate anything but 911 and very limited quality of service provisions.

5) Eliminates any requirement for phone companies or cable companies to resell capacity to third parties %u2014 %u201Cbye bye ISPs!%u201D Of course, telephone companies are still free to voluntarily allow DSL resale by thrid parties, under terms that the phone companies will set.

6) Eliminates need to open up to competing long distance providers. (Be interesting to see what happens to pre-paid long distance cards and other resellers.)

7) Any interconnection between networks (e.g., my independent facilities based wireless ISP and some internet subscriber on another network) is now effectively deregulated and subject only to private negotiation. There is a general interconnection requirement, but parties are to negotiate their own terms, subject to a complaint process at the FCC. State or local authority preempted, as is any private right of action.

8) Removes any limits on how big cable networks can get, and eliminates the ability of independent video programmers to buy their way on to cable systems (%u201Cleased access%u201D).

And, my personal favorite:

9) PREEMPT LOCAL GOVERNMENTS FROM BUILDING COMPETING NETWORKS. The Act basically adopts the %u201CPennsylvania Plan.%u201D If a local or state government wants to build a network, it must issue a request for proposal (RFP) to see if any private company wants to build the network instead. Only if no private provider offers to build a %u201Ccomparable%u201D network can the state or local government build and operate the network. Any system in existence at the time of the act is grandfathered, but only if it does not expand its network or type of service offered. If you are on the wrong side of the street when the statute passes, too bad for you.

I find this last (Section 15 of the Act) particularly outrageous in light of the fact that more than ten states have explicitly considered and rejected proposals and limitations like this.

— From the Wet machine blog

Related link:

Silicon Investor

thanks to W. Bunge via the Wet Machine



  1. T.C. Moore says:

    If _you_would look closely, John, you would see how so many of our most important government provided services are actually invented or provided by private enterprise. How about the private electricity companies that flourished after Edison invented power generation and transmission?

    Usually, the government collects the money and pays private companies to provide services, like garbage collection, electricity, and water. Oh, wait , some people pay for those services directly to the providers. Who happen to be regulated, but are still private.

    The government steps in when a project is too expensive, like Defense, dams, bridges, and such, or needs to be standardized, like the development of a stable electricity grid. (Or provides for basic research, like DARPA and the Internet.) But even that stuff usually gets recontracted out to private companies, because they already have the know-how and organization, and the incentive to complete the job (Usually).

    Governement has the power to raise money, and the know-how to make constituents happy (Usually). That’s about it. There is no doubt that government regulation is vital to many markets and industries, but that isn’t an argument for government to actually provide the service.

    Can you seriously want the City of Berkeley to provide your wireless internet access?

  2. Ethan Bearman says:

    Well, as a small business owner who lives in a rural area with ZERO high-speed internet options from the Telcos and an outrageous $1000/month offer from Sprint for a T-1 line, this concept of disallowing municipalities from providing infrastructure services, which is what we’re discussing here, pisses me off. No DSL, no cable modem, but if my township wants to build a wi-fi network, it won’t be allowed under Federal law.

    ARE YOU KIDDING ME?!?

  3. I thought the basis of our economy was that competition is good. Competition fosters new thinking and innovation. If municipals offer a free (and most likely inferior) service then private companies will need to figure how to offer additional, low cost and innovative services.

    Can we seriously argue that students in a “less desirable” part of Philadelphia do not deserve access to the tools that will help them succeed because a private corporation decided that it’s not worth their time? What about broadband access in schools and libraries should that disappear as well?

    How can we expect to compete with the countries that do decide to provide more free and innovative tools to their citizens? What are we really afraid of losing? I can personally guarantee that Comcast, Verizon and SBC will not go belly up because of free internet spots popping up around the country. I can personally guarantee that giving broadband access to people that can afford it will in no way damage our economy, freedom or democracy.

  4. Aries says:

    well, now we basically get to see how the internet works in the free market.

    Since most of the regulation is removed, that’s basically what this is, though this is a bittersweet move for a libertarian like me. While there is now more privitization and freedom in the net and communications area, the big boys already have uncle sam’s blessing and the power to crush the little guys.

  5. John Lightfoot says:

    The United States is broke and nobody wants to admit it. Business is raping the public with the government agreeing to the demands of business. The public needs to stop spending money and let business’s suffer a little like us. Maybe in the end we can separate from the government. A revolution may be in order.

    John

  6. Mark H says:

    Yes, free trade is great when it puts dollars in the pockets of the politicians and billionaires. But when regular people trying to dig their way through the sludge of the world find a way to save a dime, “screw ‘em”.
    Your best defense, complain to a Democrat and pray.