December 2010

Imagine a world where every app has its own data plan

Imagine a world in which the applications on your phone all carried different fees.

Want to launch that Facebook app? It will cost you 2¢ per megabyte of data you exchange with the social networking site -- but launch Skype, and you might find yourself billed a flat monthly rate. And preferred apps would incur no charges at all, no matter how much data is exchanged. As for the money, it's paid not to Skype and Facebook and YouTube, but to your mobile data provider, who wants a piece of the action passing over its network (and who wants to avoid becoming an undifferentiated "bit hauler").

This vision of the mobile world is feasible today, thanks to deep packet inspection (DPI) gear and some robust policy creation tools. With the right hardware and software, carriers can exert fine-grained control over billing that goes well beyond the money-for-total-bandwidth-model seen increasingly today. Of course, to critics, "fine-grained" sounds like "nickel-and-diming," and they see it as little more than an excuse to turn an open Internet into something more like a cable system, complete with different access "packages." This vision was on display in a webinar given by DPI vendor Allot and billing company Openet. The topic was "Managing the unmanageable: monetizing and controlling OTT applications." OTT means "over the top," and it refers to apps that use the Internet to reach consumers. The problem (or "problem") for wireless companies is that many of the key apps come from extremely lucrative businesses; why shouldn't the operators be able to use the size of their customer base to charge these companies some money?

Venture capital investors weigh in on FCC's network neutrality plans with differing views

Venture capital investors are closely following the Federal Communications Commission’s network neutrality proposal and offering differing opinions on what the rules could mean for their investments.

Brad Burnham of Union Square Ventures in New York thinks his portfolio companies that include Twitter and Foursquare won't be protected by the current proposal. He says the FCC falls short in prohibiting cable and telecom firms from charging fees to Web firms to access customers and for faster lanes on the Internet. Weaker wireless protections mean those firms' applications could be blocked on future smart phones and tablets, Burnham says. And without clear definitions on what “unjust and unreasonable” management of networks means, he says cable and telecom Internet service providers can use their own loose interpretations to discriminate against competing services.

Network neutrality supporters question Genachowski plan

Dozens of groups that have supported efforts at the Federal Communications Commission to create network neutrality rules have voiced opposition to a proposal from agency Chairman Julius Genachowski in recent days.

In a Dec 14 letter to the FCC, the American Library Association (ALA), the Association of Research Libraries and Educause raised several concerns about Genachowski's plan. The groups "fear that this form of proposed net neutrality is not true net neutrality," Corey Williams, associate director for the ALA's Office of Government Relations, said. The rules prohibiting broadband providers from selectively blocking or slowing Web traffic should apply to providers serving libraries and other institutions, not just consumer retail services, as the proposal suggests, the groups said. In addition, the proposal should explicitly prohibit paid prioritization, and it should drop language that says net neutrality protections should be limited to lawful traffic, the groups said.

Gigi Sohn takes on FCC's network neutrality plan

Public Knowledge President Gigi Sohn has been a vocal critic of Federal Communications Commission Chairman Julius Genachowski's policies. Her organization came out in force last week against his network neutrality proposal, which the FCC’s commissioners will vote on next week. Sohn said she will oppose the plan unless it is strengthened -- a decision that could help sink the top agenda item of Genachowski’s term and potentially obliterate his legacy as chairman.

After nearly two decades in Washington, Sohn walks a fine line between insider and watchdog. As Sohn’s influence in Washington has grown over the last two decades, she has not tempered her advocacy. After serving on President Obama’s advisory group on telecom issues, she made a conscious decision not to bite her tongue. “Right after Obama had been elected, one of my board members asked me, ‘What do you want Public Knowledge’s role with the new president [to be]?’ ” she said. Sohn told the board member, “Trusted adviser.” “He said, ‘No, that’s not what you want to be. You want to be the person who tells them the truth — the way that things should be,’ ” she recalls. “And he was absolutely right.”

FTC Chairman Leibowitz Endorses Network Neutrality

Federal Trade Commission Chairman Jon Leibowitz has thrown his weight behind network neutrality regulations under consideration at the Federal Communications Commission: "the best that could be hoped for" in spite of criticisms that the regulations are too watery.

Broadband: A must for America’s economic recovery

[Commentary] Our nation’s digital divide has made the recent economic downturn worse because minorities who lack access to broadband services face significant disadvantages in the job market. While not a panacea for the current state of the economy, broadband is certainly an industry that America can leverage to create high-paying jobs, stimulate the economy, and close the digital divide.

Closing the digital divide is important to our economic recovery because leaving minority communities behind will only increase the disparity between America’s haves and have nots. As the Federal Communications Commission begins to implement the National Broadband Plan, it should keep in mind that all Americans, particularly disenfranchised populations, stand to benefit from a broadband policy that fosters a stronger, more robust broadband industry. Broadband is quickly becoming the preferred path to finding work, obtaining an education, managing finances, and the list goes on.

Regardless of what the FCC does with network neutrality at its upcoming December meeting and regardless of what Congress may do in reaction, with so much at risk, the FCC, Congress and the Administration should make every effort to ensure that those investing in the broadband industry have the opportunity to grow and innovate for years to come. Only then will we be able to insure a place for all Americans in the economic recovery that's sure to come.

[Henry Rivera served as the nation’s first Hispanic FCC Commissioner from 1981-1985. Currently, he serves as Chairman of the Minority Media and Telecommunications Council, General Counsel for the Benton Foundation, and as a Partner at Wiley Rein.]

Google: Acquisitions and antitrust

Washington Post's columnist Steve Pearlstein asked whether Google, with a dominant share in Web search, should be able to use its near monopoly and its profits to win dominant positions in adjacent or complementary markets. Our answer is "yes."

All companies make 'build vs. buy' decisions. Sometimes it’s possible to develop a new product in-house; other times a company decides it can bring a new product to market faster by acquiring another company.
Google is competing against other companies for acquisitions. Those companies not only have substantial cash or equity that they use to make acquisitions, they also regularly compete against us and other companies to acquire leading startups.
Acquisitions are typically good for consumers and the economy. Antitrust law is designed to protect consumers, not competitors, and Google's acquisitions have created great things for consumers. For startups, getting acquired is often the path to success (especially given the difficult IPO market), so stopping large companies from making acquisitions would only deprive startups of another potential bidder and investors of a potential return on their invested capital. You can't be both pro-economic growth and anti-acquisitions.
Courts and regulators recognize efficiencies in mergers into new spaces. They also have approved many deals where the leader in one category acquired the leader in a separate category.

How Big Should We Let Google Get? Wrong Question

[Commentary] Pearlstein’s motivation becomes obvious when he says things like “The question now is how much bigger and more dominant we want this innovative and ambitious company to become,” or that he has a problem with “allowing Google to buy its way into new markets and new technologies.” Since when do we decide how big companies are allowed to become, or whether they should be able to enter new markets? Antitrust laws were designed to prevent companies from using their monopoly power to negative effect in specific markets, not simply to keep companies from becoming large.

Google Update on Google Fiber

Google is delaying, until early 2011, an announcement on which community or communities will be selected to get an ultra high-speed broadband network. Google had hoped to make an announcement in 2010, but nearly 1,100 communities responded to the experiment and the company is delaying a decision "to make sure we get this right." Medin joined Google this week as vice president of Access Services to oversee the Google Fiber team. Over the past several months Medin has been following the progress the team has already made -- from experimenting with new fiber deployment technologies here on Google’s campus, to announcing a “beta” network to 850 homes at Stanford.

Over-the-Top TV at Bottom of Station Plan

While a growing number of electronic devices are offering consumers the ability to bypass cable and satellite by delivering TV programming to their sets through broadband connections and Internet-connected TVs and other devices, TV stations aren't rushing to get on board. Station groups say over-the-top (OTT) services are simply too new and unknown. But if growth predictions are correct and if viewers continue to cut their cable cords, stations may have to turn to OTT outlets to insure their shows are reaching consumers.

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