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. Jim Dermitt says:

    This is interesting.
    “Many in Congress and at the Federal Communications Commission and Federal Trade Commission are exploring a thorny question: Is Comcast too big? What they decide could have an adverse impact on Comcast that could affect the larger cable industry at a time when Washington is seriously considering rewriting broad swaths of telecommunications policy.”-John M. Higgins
    Is Comcast Too Big?
    http://mediachannel.org/blog/node/292
    About http://www.mediachannel.org/about/

  2. Jim Dermitt says:

    Has anybody figured out this new Google Current TV format? The concept seems good, but if the idea is meshing TV and Internet why isn’t there at least a video stream online? I searched Google Video and couldn’t find a thing out about it. I ended up with CSPAN2 when i searched Google Video. Is Google involved with this? The whole user experience doesn’t make much sense at this point.

  3. Allan Bond says:

    The only parts I have a problem with are:

    1) Eliminates any state or local control of quality of service or prices – I think that local governments should have some sort of say over quality of service.

    2) Eliminates any private right of action against video or telephone providers – Why is this necessary? While I hate frivolous lawsuits, I’m wary of most laws that prevent someone from filing a lawsuit. I am, however, in favor of laws that make people think twice before filing frivolous lawsuits.

    I don’t have a problem with any of the other items. I don’t see what’s so bad about PREEMPT LOCAL GOVERNMENTS FROM BUILDING COMPETING NETWORKS. If a private company can build a network to the locality’s quality of service/price standards, why not have the private company do it?

  4. laineypie says:

    Google is not associated with Current, Al Gore’s TV Station. What they mean by saying Current content will be taken from Google they are just saying current issues that are appearing on Google will be reported by Current. Like, if we fidn out the government is lying about mad cow disease existing in our livestock and still doing nothing about it because they don’t want to upset their beef company best friends when people stop buying diseased food to stuff into their guts, and if this news was searched or found by google as a popular search, it would be reviewed.

  5. Dana says:

    In reference to the 9th disadvantage:
    It is NOT the governement’s job to compete with industries that are already growing comfortably. If the localities took over the job of being our service provider, there is NO WAY we’d ever have the newest standards and equipment under their watch.
    If the government has such an awful history of regulating tech (as previously mentioned in the twitcast), why on Earth would we want them to get in the business of it?

  6. site admin says:

    Dana, You’re killing me. That is so hilarious. You’re joking of course, right?

  7. Derek Cook says:

    I agree 100% with Dana. How can private industry fairly compete with a government operated system that is subsidized by definition by taxpayer money? Because private companies cannot effectively compete, they are pushed out of the marketplace, thus, removing the competitive impetus for system improvement and modernization. Thus, this law would, indeed, preserve competition in this cutting edge technological space. That point aside, why should the government take money by force (taxes) from people who are not interested in wireless internet access to pay for the system for those who do?

    As for local control, while I generally favor states’ rights, the reality with tech and many, especially small town governments, is that the politicians are not technically qualified to regulate modern technology. I have experienced this first hand as a wireless communications engineer who has appeared before zoning boards. In addition, when you subject corporations to a patchwork of differing regulations that increase corporate compliance costs. I do not generally agree with John McCain, but on this one, he has it right.

  8. Adam says:

    Municiple Wifi sounds nice but has some problems.
    First, it will probably run out the other internet providers. This has it own problems. It means that my internet access will be under government control, which in George Bush’s America will probably lead to it being censored and/or spied upon. Also, it would destroy a lot of jobs of the people working for Comcast, Verison, etc.
    Second, instead of me paying for my internet access, you are. This adds even more of a tax burden to those who can’t afford it. I don’t want some single mother with kids paying for something that is not required for survival. Municiple wifi sounds nice, but could have some horrible consequences.

  9. Mike Heller says:

    Personally, I’m appalled by these actions and I think that many of the posters are forgetting some common sense ideas. Let me explain:

    1) First off, I believe that each city should have the right to vote on whether they want to pay for such a service or not through their tax dollars. Don’t want it? Vote it down (yes, that means people might actually have to vote)

    2) I agree that the government has never been very good when it comes to technology, especially on the federal level. However, where does it say that the government internet will be the only game in town? Don’t like the free gov internet? Pay VeriZon or Comcast their $30-50 per month and get your internet from them. At least the people who can’t afford the $30-50 will still BE ABLE to access the internet.

    3) “free government internet will run private ISPs from the area and cost jobs as well” – The only way ISPs would be run out of town is if the government internet is a quality service and the private ISPs can’t find a way to compete with it. If the gov internet is as bad as to be believed in #2, private ISPs have nothing to fear. I don’t really think JUNO is going to bankrupt AOL even though it’s less than half the cost. This same mentality applies here. And as for jobs, if private ISPs have to fire people then I’m assuming the government will probably need to hire them – the demand for internet will, if anything, grow thus CREATING jobs.

    4) “This adds even more of a tax burden to those who can’t afford it. I don’t want some single mother with kids paying for something that is not required for survival.” – MOST of our taxes go to things that are not required for our survival. Fixing our roads is not “required for survival”, but it sure is nice to have. I DO vote to increase taxes in areas where I feel we need to invest money and I VOTE AGAINST increasing taxes in areas that I think are frivolous or the money is not controlled well enough. Free internet access for all is something I personally would definitely vote FOR. Why? Because the internet is the single largest collection of information anywhere. Let’s take the example of the single mother with kids. She could take her kids to the library everyday so they could do their reports for school (remember spending hours in the library looking for a book that wasn’t there or searching through encyclopedias?) or she could be spending time at home while the kids do their research on the living room computer. You can even take accredited classes online from the luxury of home. These days, it’s easier to find a job online than it is to go searching through all the newspapers and going around looking for signs in windows. And speaking of newspapers, she could read the local paper online without having to go out and buy it. Eventually, you’ll be able to vote online (if they ever get smart about it). Will this be the thing to turn around the current voter apathy? Government censorship? Which do you think is censored more – the internet or television and newspapers? This is a no-brainer, The list of benefits found on the internet could go on for days.

    In conclusion, if the people want this service and the government provides a good service for free then why not. If the government can’t provide a good service, then this is a non-issue. Plus, bad internet service is better than no internet service for those who can’t afford to pay for it.

  10. Merus says:

    I think that the problem with it is that, by removing regulation and the possibility of local government treating wifi as a utility like water or electricity is twofold. Firstly, you limit the scope of what wifi is allowed to do (in the same way as we were limited when the internet was less ubiquitous).

    Secondly, the role of government in a capitalistic society is twofold – to get out of the way of businesses whenever possible, and to step in when public interest and corporate interest disagree. Restricting local governments from performing this second function in the realm of wifi, Wifi won’t be able to be treated on the same level as other utilities, because there’s no way for local governments to defend the public interest.

    I also have to disagree with the assertion that government-run things necessarily lead to bad consequences – wait, that might just be in the US. There are plenty of other capitalist Western countries that have government-run utilities that are expected to perform as corporations, including being self-sufficient. In this way the government is required to play fair and can still exert regulatory influence by using market pressure.

    There are problems with this approach, but then there are problems with every approach. The trick is to plan for them and deal with them.

    (I would note what the political system is called where corporations have a major role in deciding government policy, but it’s a bit of a hot-button word and it’s not exactly applicable to the US.)

  11. christopher says:

    i feel that this discusion shouldn’t even be happing. i think this is some thing that should be decided on the state or even town levle. i mean there is no way the requirments for texes and Hawaii can’t be the same or hows this for an example cities like hartford and n.y. wouldn’t hv much trouble asking comanies to build the wifi but small towns like weston that actually hv legislation against most industry might hv a problem with askin a corpration to build a wifi network in thair town

  12. Debbi says:

    I think you’ve got two bills/people combined into one. One is Ensign’s Community Broadband Act of 2005″ which would prohibit/limit communities from offering free broadband/wireless services, the other is McCain-Lautenberg bill which seems to encourage municipalities in the broadband area. Ensign’s bill appears to be is in opposition to McCain’s, giving all of the benefits to private enterprises and limiting what municipalities can do.

  13. Woodie says:

    I don’t see your point here. You think local and state governments should use tax-payer dollars to drive private communications companies out of business? You want the government to limit the growth of private enterprise to appease smaller less successful companies? You really believe you are going to pay less to the government for communications services? I think you missed the major thrust of this bill.

  14. site admin says:

    SO what you are saying is that the public can cram it if they want to engage in any public work whatsoever? Get off this high horse. This is a democracy not a corporatocracy where the businesses tell people and communities what to do. The public is the boss, not the CEO of some telco. Geez.

  15. Marc says:

    The government never does anything better than privite competition. History teaches us this. Is it fair for the city or state to tax little old ladies who don’t have a computer surviving on a pension to pay for your internet? When you see government using its monopoly power to push out privite business fight it by voting it down!

  16. site admin says:

    History actually teaches the opposite..except for small unimportant business-related projects.

    Big and important projects are never done by private-enterprise/competition. Herod’s aquaduct to the Space Program..even the Internet. All done by governments. This notion that “history teaches us” is bullshit. You’re parroting something you heard. Go study history instead of being a robot with these cliches.

    I wonder how many of these free-enterprsie de-regulation absolutists think that national defense should be turned over to private enterprise too? You’d think that would make sense to them. How come that never comes up in the conversation?

  17. Bleue says:

    Some of these comments are very strange indeed.

    1. A government funded/run project does NOT preempt private business from creating competing projects.

    2. Preventing local governments from providing any services it sees fit creates dangerous precedents. One must remember that this prevents municipalities from building networks where no private services exists. If knome alaska, where no private provider is likely to setup a city-wide wi-fi network due to cost/benefit considerations, wants one what exactly is their recourse? Ah yes but if no private company wants to build a network there… Does anyone seriously believe that private carriers will allow public networks anywhere when all they have to do to prevent it is feign possible interest in the area? What of public universities and high schools? If a university wants to setup a campus wide wi-fi network they cannot?(private companies are especially not likely to pass up this oppotunity) Should students be force to subscribe to private carriers if they want portable internet access?

    3. Why stop at telecoms? Why not create legislature favoring private police, firefighting, garbage disposal? Such a time did actually exist, during which if you could not pay for these services you simply did not get them.

    4. One need not go so far as the space program or the military: privatization of basic services in the third world is regarded as a nearly universal disaster. Services are expensive and provided only to those who can pay, anyone who can’t must learn to do without. And in the third world we are not talking about WI-FI.

    5. The greates danger here is that none of the oversight mecanisms that exist for public institutions regulate private companies. In fact, those mediocre oversight mecanisms that DO exist are being actively torn down by lawmakers, under pressure by lobbyists, with alarming efficiency. In fact, the threat of a public provision of currently private ventures are just about the only form of effective oversight for these companies, so eliminationg the possibility simply encourages abuse by private companies.

    6. This history shows us arguement is particularly silly, as has been noted already. One need not search high and low for examples of projects that never ever would have happened had they been left to the private sector. Examples have already been listed to which I would only remind people that digital computers themselves are a government invention.

  18. Jason says:

    Marc -says

    “Is it fair for the city or state to tax little old ladies who don’t have a computer surviving on a pension to pay for your internet?”

    Sure it is. I mean, I pay taxes on roads I never drive on, taxes on libraries that I never visit, and in parks I never visit. What’s so different about this. If my local government wants to build a WIFI grid over my community, so be it, it will aid in increasing the quality of living for the majority.

  19. AB CD says:

    Take a look at the Post Office or Fannie Mae or even Amtrak to see the problem with this. The Post Office gives itself a de facto monopoly and is involved with all sorts of side services while running the main deliveries inefficiently. Fannie Mae is squeezing out private mortgage lenders. Neither enterprise pays taxes, and Fannie Mae gets a superior bond rating because of its quasi-government status. Businesses are not on an even playing field with a government wi-fi, and there the goal isn’t even to make money. That said, if a locality wants to do this, they should be allowed to.

  20. Smith says:

    It is a proper role of government to provide infrastructure. Corporations are driven by profit. If Comcast can lay a mile of fiber to reach 10,000 potential customers, then it will do so. But don’t hold your breath waiting for it to lay that last mile needed to reach 10 potential customers. Does anyone doubt that some communities never would have received phone service if Ma Bell had not be forced to provide it?

    Capitalism works great when customers get to choose the products and services they purchase. Capitalism fails when corporations can dictate terms to their customers. And I don’t want to hear any BS about how the marketplace will self-correct abhorrent corporate behavior.

  21. 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?

  22. 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?!?

  23. 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.

  24. 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.

  25. 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

  26. 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.