Dan Lyons : The Internet Splits in Two

FCC Chairman Julius Genachowski speaks to media on net neutrality December 1, 2010 at FCC headquarters in Washington, DC. Photo by Alex Wong / Getty Images.
Compromise on net neutrality:
The Internet splits in two

By Dan Lyons / The Daily Beast / December 22, 2010

Tuesday’s FCC ruling on net neutrality shifts billions in profits and boils down to one fact: There will soon be a fast Internet for the rich and a slow Internet for the poor.

The Federal Communications Commission approved a set of net neutrality rules Tuesday, and nobody is happy. While liberals claim the FCC has caved to pressure from carriers, right-wingers are calling the new rules a government takeover of the Internet. In their tea-addled brains, the new rules represent yet another example of creeping socialism taking over every aspect of our lives. FCC Chairman Julius Genachowski is "Julius Seizure." Cue the black helicopters.

No matter what you think about the new rules, however, they signal an important turning point in the development of the Internet. We are going from Phase One, where everything is free and open and untamed, into Phase Two, which is all about centralization, consolidation, control -- and money.

Because don’t kid yourself. Money is driving all of this. As in: Hey, we’ve created this marvelous new platform for communicating with each other. We’ve demonstrated that very large sums of money can be generated by sending stuff over these wires. Now let’s figure out who gets what.

Tuesday’s new FCC rules grant two big concessions to carriers. First, the rules will apply to wired broadband connections, but they will pretty much leave wireless alone. Second, carriers remain free to create “fast lanes” on the Internet. They can charge Internet companies to ride on the faster pipes, and perhaps also charge consumers more money to get access to those speedy services.

That is a huge deal. It means we are entering an age in which we will have two Internets -- the fast one, with great content, that costs more (maybe a lot more) to use, and then the MuggleNet, which is free but slow and crappy. Cable TV vs. rabbit ears.

On wireless -- which eventually will be the more important platform -- that disparity will be even more evident. The rich will get great stuff. The poor will get, well, what the poor usually get, which is not much.

Oddly enough this bifurcation resonates beyond just the speed of our Internet connection. It also is happening to information itself. We could be heading into a world where the rich get better information, from a wider choice of sources, while the poor get less.

That’s already happening, to some extent. If you’re a trader on Wall Street and can afford a Bloomberg terminal, you get better information sooner than the poor schlumps who are home trying to play at being day traders.

It will happen even more as news organizations, like Rupert Murdoch’s News Corp. and The New York Times, start putting content behind pay walls.

And so the digital divide widens into an information divide, which of course has huge implications for politics, economics, and even democracy itself.

Consider that in the 2008 election both sides were struggling to reach so-called low information voters. What happens when access to information becomes even more restricted? Where your ability to become informed is based upon your ability to pay? That’s the world we’re heading into. The first 15 years of the Internet, where it was all about peace and love and freedom, are drawing to a close.

The ultimate irony is that we are creating an information age where some of us -- many of us -- will get less information instead of more.

In his terrific new book, The Master Switch: The Rise and Fall of Information Empires, Columbia University professor Tim Wu describes the way every new communication platform starts out with a phase where there is openness and innovation, and where lots of amateurs (now we call many of them “hackers”) try out different things and spout lots of utopian rhetoric about making the world a better place.

Then, about 15 years in, things start to close down and become more centralized. The new platform becomes dominated by a small number of companies in the hands of powerful visionaries with an urge for empire-building. This also happened in telegraph, movies, radio, telephone -- and now it’s happening to the Internet.

Steve Jobs is building an empire around selling music, movies, and news to people who own iPhones and iPads. Mark Zuckerberg is building an empire around the gathering and selling of the personal data of a half a billion people.

Now the carriers get their slice of the action. A lot of people hate the carriers, but try, for a moment, to see the world through their eyes. For 15 years they have sat around watching hundreds of billions of dollars of market value get created on the end of their wires (Google, eBay, Apple, Netflix, Amazon, Facebook) while all they get is a puny monthly subscriber fee.

The carriers won’t say this publicly, but I’m sure they resent being denied a share of the wealth being created on the platform that they’ve been so kind to build and maintain for the rest of us. What they also won’t say publicly, or at least not in this blunt a fashion, is: If you want us to keep building out more bandwidth, then start sharing the loot. Otherwise you can go build your own high-speed network.

Obnoxious? Certainly. But also persuasive. The FCC’s compromise probably represents the best deal anyone could get.

What this means for society remains to be seen. But I’m pretty sure those of us who have been around for Phase One of the Internet are going to look back on these last 15 years as the good old days.

[Dan Lyons is technology editor at Newsweek and the creator of Fake Steve Jobs, the persona behind the notorious tech blog, The Secret Diary of Steve Jobs. Before joining Newsweek, Lyons spent 10 years at Forbes. This article was originally published by the The Daily Beast and was distributed by Free Press.]

Obama caves on net neutrality



Interview with Timothy Karr, director of Free Press, by the Young Turks

The Rag Blog

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William Michael Hanks : Net Neutrality / Open Internet Under Fire

Cartoon from Schrier Blog.
Is FCC dropping the ball?
The fight for a free internet

By William Michael Hanks / The Rag Blog / October 15, 2010

Also see Mike Hanks' companion article: Net Neutrality / Stop Thief!

And see Net Neutrality Timeline, Below

A strong right punch from the DC Appeals Court in April stunned the FCC, leaving it dazed and staggering. The champion of the people's Internet entered the ring with a good fight plan and a righteous score to settle with the opponent.

But, in a strong defense by a heavy-muscled corporation, the court delivered a near knockout punch to the open Internet defender. Blocking the FCC's regulatory blow to Comcast, the court held the FCC had no authority to regulate Comcast's Internet bandwidth management policies.

The fight started brewing in 2007 when the Associated Press (AP) discovered that Comcast was blocking transmission of BitTorrent Peer-to-Peer file exchanges without notifying customers. A complaint was filed with the FCC by Internet and legal advocates and the FCC held public hearings on the issue. But at the first bell Comcast was caught wearing brass knuckles under the gloves.

Then FCC Chair Kevin Martin called for public comments. The first hearing was at Harvard and was packed with shills, hired by Comcast, who filled the available seats. Advocates of an open Internet could not be seated and the campus police blocked their entry. Public outcry and overwhelming evidence moved the FCC to sanction the media giant anyway. That's when the battle got bloody.

Comcast punched back with a suit in federal court that demanded a stay of the FCC sanction. The court held in early April that a change during the Bush administration shifting the authority in such matters from Title II to Title I of the Communications Act resulting in the commission being powerless in the matter.

That left the current FCC Chair Julius Genachowski with only one backup punch -- to switch the authority back to Title II of the Communications Act and reassert control over Internet services. But so far the Commission seems dazed and unable to react.

In August, while the Commission was still seeing stars, Google and Verizon proposed a "compromise" that called for unhindered Internet access for wired customers while leaving the door wide open for wireless providers to decide whatever they like, regardless of customer demands. They insist that their ambitious plans to enter the wireless business had nothing to do with their suggestion.

Another blow to Net Neutrality came in September when Sen. Henry Waxman, Chairman of the House Energy and Commerce Committee, announced he was dropping the push for a Net Neutrality bill in Congress. This came after the Open Internet Coalition pulled it's support and it seemed unlikely the bill would receive Republican support.

Calls for Chairman Genachowski to act on the promises made by President Obama to vigorously fight for a free and open Internet have gone unheeded. It's looking more like a free-for-all -- a fight where the referees seem to be bought and the champ's taking a fall.

Unless the FCC gets off the mat, the next round will be when Congress reconvenes after the elections. By then the ringside tickets will be sold out, the fix will be in, and the citizens -- the real owners -- will get the cheap seats where they can't be heard. But, hey, maybe it'll all be on television, if you paid your cable bill.

[William Michael Hanks lived at the infamous Austin Ghetto and worked with the original Rag gang in the Sixties. He has written, produced, and directed film and television productions for the National Aeronautics and Space Administration, The U. S. Information Agency, and for Public Broadcasting. His documentary film The Apollo File won a Gold Medal at the Festival of the Americas. Mike lives in Nacagdoches, Texas.]

Also see:

• William Michael Hanks : Net Neutrality / Stop Thief! / The Rag Blog / October 15, 2010

Super highway: Traffic jam ahead? Photo by Sean Nel. Image from Robin Good.
Timeline of recent events (from SaveTheInternet.com).

2007. Comcast gave us a glimpse of a world without Net Neutrality when an Associated Press investigation found that the company was blocking the file-sharing application BitTorrent. Despite mounting evidence of Internet blocking, the company refused to come clean and disclose its “network management” practices. A coalition of Net Neutrality supporters and legal scholars filed a complaint with the FCC urging the agency to stop the cable giant from meddling with our ability to share information online.

2008. The FCC took complaints about Comcast’s blocking seriously and convened a series of hearings across the country so that interested citizens could weigh in. Fearful that the public would lay into Comcast for violating Net Neutrality, the company hired people off the street to pack the first hearing at Harvard. The seat fillers took up so many chairs that Comcast critics and other members of the public were denied entry by campus police.

In response to the public outcry and a mountain of evidence, FCC Chair Kevin Martin sanctioned Comcast for violating Net Neutrality. The complaint was brought to the agency after a coalition of Net users and activists caught the cable giant red-handed, jamming use of popular file-sharing applications. Martin ruled that Comcast had "arbitrarily" blocked Internet access and failed to disclose to consumers what it was doing. But the ink was barely dry on the FCC order before Comcast filed an appeal in federal court, challenging not only the FCC’s ruling but the agency’s entire authority to protect Web users.

2009. Buried deep in President Barack Obama's American Reinvestment and Recovery Act is a line that brought a smile to the faces of Net Neutrality supporters -- and a scowl to phone and cable industry lobbyists. It requires that billions of dollars directed to connect more Americans to broadband be spent on services that meet "nondiscrimination and network interconnection obligations." The stimulus package stipulated that federal money earmarked for high-speed Internet services be spent the right way: building networks that abide by Net Neutrality.

The fight for Net Neutrality gained ground when Julius Genachowski, the newly appointed FCC chair, announced plans to expand existing agency rules to protect the free and open Internet. Genachowski said the FCC must be a "smart cop on the beat,” preserving Net Neutrality against increased efforts by providers to block services and applications over both wired and wireless connections. The chairman cited a number of examples where network providers had acted as gatekeepers and concluded, “If we wait too long to preserve a free and open Internet, it will be too late.

2010. As the FCC began its Net Neutrality inquiry, the phone and cable industry that controls Internet access for 97 percent of Americans went into a spending overdrive. They funneled tens of millions of dollars to nearly 500 Washington lobbyists. Their mission: further consolidate industry control over Internet access and kill Net Neutrality, before the public gets a say. Untold sums have also been spent on Astroturf groups, fake grassroots operations that are funded by corporations to manufacture the impression of public support and that generate misinformation designed to sway policymakers and the media.

In early April, the U.S. Court of Appeals for the D.C. Circuit ruled that the FCC lacks the authority (under the jurisdiction it claimed) to protect Internet users against network operators. The case was brought by cable giant Comcast after it was sanctioned by the FCC for blocking Net users’ access to file-sharing applications. The ruling effectively gave corporate gatekeepers control over Internet users’ online experience, and it called into question the FCC’s ability to act as a public interest watchdog over our country’s communications media.

We now wait to see whether the FCC will reclassify the Internet Service Providers from Title I to Title II and thereby reassert jurisdiction or whether Congress will act with legislation to preserve Internet Neutrality. Nothing is likely to happen before the mid-term elections. The outcome of those elections will undoubtedly affect the vitality of efforts to save the Internet from corporate piracy.

The Rag Blog

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Comcast-NBC Merger : Controlling Content and Delivery

Image from ZeroPaid.
The Comcast-NBC marriage:
The importance of Net Neutrality

With a monopoly on delivery, what’s to stop a new breed of ISPs/cable providers from dictating content to customers?

By Jared Moya / December 10, 2009

See 'Internet war: The fight for free access,' Below.

A scary thing happened last week when the Comcast Corporation, the largest cable provider in the U.S. and ISP to some 15 million customers, decided to to purchase NBC Universal in order to delve further upstream from the pipe that simply delivers content to the world where’s it created.

“We believe this venture represents a natural evolution in the world of communications and entertainment, a marketplace that becomes more open, more competitive, and more global every day,” it says. “The opportunity to combine these assets makes possible some innovative programming opportunities that will permit the new company to better serve the interests of many key segments of the viewing audience, including local viewers in the markets served by NBCU’s owned-and-operated stations, and the particular interests of Hispanics, African Americans, children and families, and other key audience segments. This combination also permits us to hasten the arrival of the multiplatform, ‘anytime, anywhere’ future that Americans want.”

In other words, it has seen the writing on the wall in terms of streaming video-on-demand services. Consumers increasingly want to watch content when and where they want.

However, the move means Comcast will control every step of the system from content creation to delivery, and could easily begin preventing customers from accessing competing content or charging them more to do so than they would normally as a sort of a penalty.

“While we believe that this transaction is, and will be determined to be, pro-competitive, pro-consumer, and strongly in the public interest, we recognize that competitive concerns will be raised about the combination of such significant multiplatform assets in a single company,” it adds. “Therefore, we also intend to make a number of affirmative voluntary commitments in our applications for approval that we believe will effectively address any such concerns.”

It leaves out the fact that none of its “commitments” say anything about guaranteeing online access to its competitors or allowing competing streaming services to exist on its network. Since streaming is the future of content delivery it’s important that equal access be guaranteed to all, especially since ISPs enjoy regional monopolies around the country (try finding more than one broadband provider in your area).

“I am not exaggerating when I say that Comcast’s proposed acquisition of NBC Universal poses a genuine threat to free expression and diversity of speech in our democratic society,” says Andrew Jay Schwartzman, president of the Media Access Project, a non-profit law firm and free speech advocacy organization that promotes freedom of expression, independent media, and low-cost, universal access to communications services.

“I believe that the sale should not be permitted. The deal is the first attempt at vertical integration of content and delivery in the broadband era. It presents antitrust and communications regulators with the challenge of addressing whether any one company should be allowed to hold dominant positions in both video and Internet delivery,” he says.

Exactly.

The easiest manifestation of the harm it could do to competitors is the simple withholding of NBC content from both standard cable and online competitors. It also has an inherent interest in making sure that competing video streaming services don’t succeed.

Comcast CEO Brian Roberts says that “today NBC makes certain content available online and I can’t imagine we will change that process,” but we all know that could change with time. The primary concern of a business will always be profits, and it’s only a matter of time before Comcast begins attempting to maximize the potential of of NBC content by dictating the price and availability.

Gigi Sohn, executive director of Public Knowledge, a public interest advocacy organization dedicated to promoting the public interest in access to information, warns that the deal will ultimately harm consumer choice and result in higher fees for services.

“With all that programming under its control, Comcast will have every incentive to take its shows off of the Internet and force consumers to buy a cable subscription to get online access to that programming,” she said. “Want to watch reruns of 30 Rock? Buy a Comcast subscription.”

The whole affair makes Network Neutrality even more important. Federal Communications Commission (FCC) Chairman Julius Genachowski has already emphasized that we need to “safeguard the free and open Internet” by ensuring, among other things, that consumers must be able to access the lawful Internet content, applications, and services of their choice.

Without it, Comcast will have a free hand to do as it pleases.

Stay tuned.

Source / ZeroPaid

Graphic from techrepublican.

Internet war:
The fight for free access

There is a silent battle occurring in Washington, D.C., over our ability to freely access and exchange information through our last unbiased medium, the Internet. The telecom industry is feverishly buying up policy-makers in an attempt to block new, unanimously approved FCC regulations on Internet service providers.

The new plan would ensure Internet users' equal rights to its content, while prohibiting broadband providers such as AT&T, Comcast and Verizon from selectively blocking or slowing content and discriminating against competitors.

In retribution, the big telecom interests are sending a message using their highest paid member of Congress, Sen. John McCain, to submit the Internet Freedom Act, which is anything but. The act states the FCC "shall not propose, promulgate or issue any regulations regarding the Internet or IP-enabled services."

So the FCC would not be allowed to be the FCC, giving service-providers freedom to control, without checks, any and all bandwidth, connection speed, content and applications.

Misleading policy makers and scare tactics should be ignored. FCC regulations would only affect the big Telecom interests and not the Internet itself. Opponents mistakenly claim regulations might slow innovation. Does this include censoring, blocking or stifling applications such as VoIP, Google Voice and legal peer-to-peer networking applications by companies such as AT&T and Comcast?

Regulation preventing such acts, according to a number of studies, will not only lower prices and guarantee higher performance overall, but open the web to more users -- allowing people to share ideas and programs and accelerating innovation and investment. AT&T's own two year experiment in 2006 with neutrality rules brought about greater increases in investment than any other ISP in America.

What deregulation means to these companies is not freedom from some fictitious dictatorial power but immunity from having to answer for their own irresponsible and inevitably oppressive actions. What has deregulation really given us, besides robbing us of laws designed to protect the environment, worker safety and consumer rights?

Michael A. Burger / CJOnline

• For previous Rag Blog articles about Net Neutrality, go here.

Thanks to Media Reform Daily / The Rag Blog

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Time Warner Singles Out Geek-Rich Austin for Metered Broadband Trial

Penny-pinching broadband. Graphic from DVICE.com

Austin is not a city that takes its broadband lightly. It’s home to supercomputers, digital media studios and online gaming companies. Thanks to that, it’s now a microcosm for a battle against consumption-based broadband attempts around the country.

By Stacey Higginbotham / April 6, 2009

When it comes to trialing its metered broadband service, Time Warner Cable’s choice to do so in the tech-savvy city of Austin, Texas, was no accident. And residents may not be able to do much about it.

According to TWC spokesman Jeff Simmermon, Austin’s dedication to all things digital was precisely why it was chosen as one of four cities where the company plans to trial consumption-based broadband plans, which range from 5 GB to 40 GB per month (TWC says it has plans for a 100 GB-per-month tier as well). “Austin is a passionate and tech-savvy city, and the spirit that we’re approaching this (metered broadband) test with is that if it’s going to work, it has to work in a tech-savvy market where the use patterns are different,” he told me.

So far, Austin isn’t impressed, but since the local cable franchise it grants only deals with video, there may not be much it can do. Chip Rosenthal, one of seven commissioners on the City of Austin’s Technology and Telecommunications Commission (a strictly advisory body), hopes that concerned citizens will show up at the meeting it’s holding at City Hall this Wednesday and talk about metered broadband. He wants to get the metered bandwidth issue added to the agenda of the commission’s May meeting as well.

But local efforts aside, Rosenthal says Austin will have to take a national approach, either through Congress and the Federal Communications Commission, or through a lawsuit to prevent or influence the deployment of metered broadband. “The city has much greater national influence than you or I as individuals, ” Rosenthal said.

He’s right, but for those wanting to express their individual disdain, here’s an online petition put forth by a local citizen. As for the city, it’s encouraging to note that within two days of the story breaking, two of the city’s mayoral candidates issued statements questioning such caps [Lee Leffingwell and Brewster McCraken]. One noted that downloading the first season of my hometown’s favorite TV show, “Friday Night Lights,” would require almost 31 GB and would subsequently put people in danger of violating the current top-tier cap of 40 GB. “Friday Night Lights” isn’t just about Texas football, it’s also shot in town, and an important showcase for film production here in Austin.

Austin is not a city that takes its broadband lightly. It’s home to supercomputers, digital media studios and online gaming companies. Thanks to that, it’s now a microcosm for a battle against consumption-based broadband attempts around the country. If metered broadband works in Austin, then it can work anywhere — even in your hometown.

Source / GigaOM

Thanks to Media Reform Daily / The Rag Blog

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FCC : The Controversial Legacy of Chairman Martin

FCC Chair Kevin Martin leaves a mixed legacy.
'“For a deregulator, he was amazingly pro-consumer in his interventions,” said Gene Kimmelman, of Consumers Union. “Nobody thought he was going to be like this.”'

By John Dunbar / January 15, 2009

WASHINGTON – Among the legions of predictable, starched-shirt regulators that populate Washington, outgoing Federal Communications Commission Chairman Kevin Martin has been a conundrum.

Martin, who announced this week he will step down from the commission on inauguration day, is a self-described free-market Republican. Yet he has nevertheless used his considerable power to push consumer-friendly policies that angered cable television companies, like “a la carte” pricing that would allow customers to select and pay only for the channels they really want. In addition, he pried open wireless networks, protected Internet users from unequal treatment by service providers, and paved the way for a new generation of wireless Internet devices.

But Martin has also toed the deregulatory GOP line by backing major corporate mergers, removing regulations on giant telecommunications companies, and enforcing strict limits on racy content on television.

While those positions may seem contradictory, telecommunications veterans say there is a common thread — he has fought consistently to open markets to new competitors. That may be the most important legacy of Martin’s almost four years as chairman. Whether anyone remembers it, though, is another question.

What will be remembered is Martin’s controversial bedside manner. A congressional report depicts Martin as running the FCC in a Machiavellian fashion, fostering a climate of “deception and distrust.” The report blasted the chairman for creating a “climate of fear” at the agency and withholding information from other commissioners and staff to further his agenda. In his almost four years at the helm, in fact, the chairman managed to aggravate a remarkable cross-section of politicians, consumer advocates, industry lobbyists, and agency employees.

“People,” said Martin, “have a tendency to remember all the things they are mad at you about.”

The FCC chairman traditionally leaves the commission when a new president takes power. Martin announced he would resign at his final meeting Thursday, and allowed his young son Luke, 3, to bang the gavel for him.

Martin’s successor, according to people briefed by the Obama transition team, will be Julius Genachowski, a technology entrepreneur and former Harvard classmate of Obama’s. Genachowski’s first order of business will be overseeing the transition of the nation’s broadcasters to digital broadcasting on February 17. President-elect Obama wants to delay the switch.

Martin will take a position at the Aspen Institute, a nonprofit leadership training organization and think tank that has become popular place to work for former FCC chairmen, such as Michael Powell and William Kennard.

Contrary from the Beginning

Martin’s contentious tenure has been full of surprises. His habit of occasionally siding with the two Democrats against his fellow Republicans on the five-member commission could hardly have been predicted, given his mainstream GOP background. The 42-year-old North Carolina native came to the commission with both political connections and hands-on experience in the arcane world of telecommunications regulation.

He is former deputy general counsel for the 2000 George W. Bush campaign and also served as legal adviser for former Republican FCC commissioner Harold Furchtgott-Roth.

Bush named Martin to the commission in 2001. In 2003, Martin gave a glimpse of his partisan independence in a highly publicized vote regarding local telephone competition. Martin sided with the two commission Democrats against a proposal by then-Republican chairman Michael Powell to partially deregulate dominant local telephone carriers. It was a stinging defeat for Powell and his supporters. Yet in the same proceeding, Martin also supported less regulation of Internet services.

Martin would succeed Powell as chairman in March 2005.

A la Carte and the Cable Crusade

Not long after taking over as chairman, Martin began pushing the cable companies to sell channels on an “a la carte” basis. Cable systems normally sell their service to customers in tiers, or program packages, at a flat rate. Each tier includes a substantial group of channels. It is a carefully calibrated arrangement between operators and programmers that has generated steady profits for decades. Martin wants cable companies to sell programming on a per-channel basis, arguing that under the current system, viewers are stuck paying for channels they do not want and may not want their children to see. But the cable companies are vigorously opposed to a la carte.

Under Powell, the FCC released a study that said a la carte pricing would raise prices for the average customer. Under Martin, a second report was released, refuting the previous study. This one said there would be “substantial consumer benefits” in an a la carte world.

“We’ve seen decreases in wireless prices, long distance calls, local calls, and international calls,” Martin said. “If you look at broadband prices, with competition primarily cable and telephone, you’ve actually seen dramatic price declines in broadband services since 2001.”

But cable prices have “skyrocketed” in the past decade, he said. “Consumers are also forced to purchase bigger and bigger bundles of channels, regardless of which ones they may actually want.”

Martin’s claims about prices are “distorted, disingenuous, and no longer relevant” in a market where voice, video, and Internet services are bundled together, said Brian Dietz, a spokesman for the National Cable and Telecommunications Association. When considering all services, prices have actually dropped, he said.

Despite Martin’s efforts and some support on Capitol Hill, a la carte pricing never became a reality during his tenure.

Anti-Cable or Pro-Bell?

In the modern telecommunications era, what’s bad for cable is often good for traditional telecommunications companies, such as Verizon Communications Inc. and AT&T Inc. The two industries compete directly. Cable companies are offering phone service while phone companies are offering television service, and each side is looking for any edge it can get.

Some in the cable industry say Martin has favored the traditional telecom giants over cable companies. In late 2006, Martin worked hard to push through AT&T’s buyout of BellSouth Corp., the largest telecommunications merger in history. The deal faced heavy opposition from consumer groups and smaller telephone companies who feared the re-emergence of the old Ma Bell monopoly.

Around the same time, Martin also pushed through a proposal that would help Verizon and AT&T provide television service in local markets more quickly. Democrats opposed the move as did community advocates. Cable companies sign agreements with local governments to provide service. The new FCC rules would strip away some of the bargaining power of small communities who want cable operators to provide public access channels, city lawyers said.

He kept up the pressure on cable throughout his tenure. Martin re-established a national subscribership cap on cable companies. No single operator is allowed to reach more than 30 percent of pay-television households nationwide. The rule prevents the largest cable companies, like Comcast Corp., from growing much larger.

Martin also attempted — ultimately unsuccessfully — to push through a report that showed the industry had achieved a saturation level nationally that would trigger a clause in federal law allowing for more government regulation. And he granted requests from AT&T and Verizon to shed certain regulatory requirements. For example, the FCC allowed AT&T relief from certain accounting reporting rules.

Martin denies that he favors AT&T and Verizon over the cable industry. “I’ve actually moved on just as many orders trying to facilitate and open up the voice market to cable competition as we have video markets to video competition for the telephone companies,” he said.

Open Access

Among the FCC’s most important tasks is allocating radio frequencies to cell phone companies and other commercial users. In 2008, an extremely valuable portion of this radio spectrum, to be vacated by television broadcasters, was auctioned. But rather than simply sell off the spectrum to the highest bidders, Martin applied restrictions on how some of it could be used.

For instance, he applied a so-called “open access” provision, meaning the winner of one large block of the spectrum was required to allow customers to use any kind of device or software they want, as long as it did not endanger the network. Until the FCC action, the cell phone industry in the United States was a closed system. Customers were stuck using phones and software applications provided by service providers.

Martin prevailed, joined by the two commission Democrats and Republican commissioner Deborah Taylor Tate.

For a Republican like Martin to have gone down that road, said telecommunications analyst Jessica Zufolo of Medley Global Advisors, was “unprecedented.” The wireless industry opposed the rules, and ended up filing a suit in federal court seeking to get them tossed out. The suit was dropped in November.

Meanwhile, AT&T and Verizon ended up winning about 80 percent of the spectrum, which raised more questions — this time about whether the wireless industry is competitive enough.

Media Ownership and Network Neutrality

But allocating radio spectrum was hardly the only bruising battle in which Martin engaged. To the surprise of many, in 2007 the chairman also tackled a rewrite of rules restricting media ownership — a sort of third rail of FCC politics.

After months of hearings staged across the country, Martin proposed the loosening of a single rule — the ban on newspapers owning television and broadcast stations in the largest markets. It was a modest move compared to the massive deregulation that was approved in 2003, a decision that was later largely invalidated in federal court.

In this case, Martin was joined by his two Republican colleagues in a 3-2 vote. Democratic commissioner Michael Copps said it was a decision that would “make George Orwell proud.”

Not long after, however, Martin found himself friends with the Democratic commissioners again. Comcast, the nation’s largest cable company and a major provider of high-speed Internet service, was accused of blocking “peer-to-peer” traffic on its network. Peer-to-peer software is often used to upload very large video files. Comcast’s action was in violation of the agency’s policy statement on “network neutrality,” Martin said.

In a highly publicized vote, Martin joined with the two Democrats in finding the company guilty, though no fine was issued. Comcast, which maintained that the policy statement was not enforceable, said that it had merely delayed traffic from users who pump a disproportionately high amount of data through the network, to the detriment of other customers. Comcast sued, and the case is ongoing.

There is some disagreement about the lasting significance of the FCC action — but the bottom line, most agree, is that a precedent was set allowing the agency to intervene when it determines Internet providers are operating networks in a discriminatory fashion.

Profanity Debate Hits High Court

The decision in the Comcast court case is highly anticipated, but it is not the most high-profile FCC policy under judicial review.

A federal appeals court in June 2007 invalidated the agency’s policy on what constitutes indecent speech on the airwaves. Martin and the agency sought a review by the Supreme Court, which has taken the case. It will be the high court’s first review of broadcast indecency in more than 30 years, and it could rule as early as March.

The issue is over so-called “fleeting expletives.” The court is being asked to evaluate the agency’s position that the “F-word” and the “S-word” are inherently indecent and deserving of sanction in virtually any context. Broadcasters say the agency’s interpretation of what constitutes indecent content has been inconsistent and unconstitutional, and has chilled speech.

Martin has been a social conservative on broadcast speech issues. He has also complained about violent content on television as well as advertising he claims has contributed to an obesity epidemic among the nation’s children.

“I come from a very family-oriented background. I’m concerned about the impact the media has on our children,” he said. “We must have limits that distinguish what is appropriate from what is not appropriate in mainstream media where children are likely to be watching television.”

The Investigation

While many of the debates during Martin’s tenure involved substantive disagreements, it was the chairman’s style, above all, that got him into trouble. It all seemed to come to a head at a November 2007 meeting, when he tried to present a statistical report demonstrating that the cable television industry had surpassed a subscription saturation threshold that might trigger additional government regulation.

In a highly rancorous meeting, he was accused of selective use of data, and after other commissioners cried foul, he withdrew the report.

That meeting, in addition to other complaints about how Martin ran the commission, sparked a bipartisan investigation by the House Energy and Commerce Committee’s Subcommittee on Oversight and Investigations.

Investigators spent nearly a year looking into Martin’s regime, reviewing 95 boxes of documents and conducting 73 interviews of former FCC employees. No hearings were conducted, nor was there a vote on the report. Republicans opted not to join in the ultimate findings. The report, released in December, was scathing.

Singling out the a la carte and cable subscribership issues specifically, the report pointed to instances in which the chairman “manipulated, withheld, or suppressed data, reports, and other information.” Investigators said Martin possessed a “heavy handed, opaque, and non-collegial management style” that had “created distrust, suspicion, and turmoil among the five current commissioners.”

Martin called the report “old-style politics” and said many of the specific criticisms were about problems that occurred prior to his chairmanship. And Martin said he did not handle information any differently than it had been handled under previous chairmen at the agency.

But current and previous FCC staffers say Martin could be maddening to deal with. He seemed to plot a course of action and stick to it regardless of the introduction of any new facts, they contended. “In government it’s important how you go about your decision making,” said one FCC official who asked not to be named because he is not authorized to speak to the press. “It’s not fixed from the very beginning.” With Martin, “not only was it fixed, he had a position on essentially everything, and he linked everything together in order to maximize leverage.”

Martin disputes this, pointing to the wireless auction as an example. He was initially opposed to the open-access requirement, he said, but after hearing from consumer groups and others, he changed his mind.

Last Flurry Falls Short

Martin seemed mostly undeterred by the congressional report. In fact, he was determined to go out with a flourish as FCC chief by pushing through plans to vastly expand access to high-speed Internet service.

One initiative — to use the frequencies that exist between television channels for new wireless devices to connect to the Internet — was successful, despite relentless opposition from the broadcast lobby.

Martin also made some progress reforming the Universal Service Fund — a giant pot of money paid into by phone subscribers to subsidize phone service in rural areas. Martin wanted to reform the fund and use it to provide Internet service in those areas. In the end, he was able to get the commission to cap the growth in one part of it and convince the agency to look into comprehensive reforms.

Martin was unable, however, to secure support from either party for his boldest broadband initiative. He wanted to auction off a swath of airwaves and require a portion be used to provide free wireless broadband access to most of the population. But with time running out, President Bush’s Commerce Department and incoming chairmen of both House and Senate committees that oversee the FCC recommended that he not pursue the plan.

Legacy of Openness

Looking back, Martin says he is most proud of his efforts to provide wireless broadband access to consumers and crack open those networks to competing devices and applications. His philosophy, he said, has been that “we’ll rely upon the markets to determine competition to a large extent, but we must be willing to step in when the market cannot fix itself.”

Even some of Martin’s fiercest critics say he has followed through on those commitments.

“For a deregulator, he was amazingly pro-consumer in his interventions,” said Gene Kimmelman, vice president of international affairs for Consumers Union. “Surprisingly pro-consumer. Nobody thought he was going to be like this.”

As for the controversies, Martin remains philosophical.

“I am willing to push the fact that we need to make decisions. I am willing to make very hard decisions,” he said. “And in the past, some commissioners haven’t wanted to make the difficult decisions.”

[John Dunbar is a senior fellow at the Center for Public Integrity.]

Source / The Center for Public Integrity

Also see House Democrats call FCC under Martin 'dysfunctional' Orbitcast / with link to Congressional Report.

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