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On March 3, House Commerce Committee Chairman Fred Upton sent 6 network neutrality-related questions to Federal Communications Commission Chairman Julius Genachowski as follow-up to a February 16 hearing:

  1. You said at the hearing that you would find for us the market analysis the Federal Communications Commission (FCC) conducted justifying government intervention. Please point us to the specific paragraphs and language in the order providing that analysis.
  2. President Obama said in a January 18,2011, Executive Order that agencies should base regulations on a reasoned determination that their benefits justify their costs. While the Executive Order does not apply to independent agencies, the President urged such agencies to follow it, and you have indicated that you plan to do so. Please point us to the specific paragraphs and language in the order containing the FCC's cost-benefit analysis justifying your intervention.
  3. President Obama has said that it is important in the current fiscal environment to focus on promoting the economy and creating jobs. Please point us to the specific paragraphs and language in the order analyzing the impact of your rules on the economy and the creation or loss of jobs.
  4. The order concludes that its rules will have "minimal" burden on small businesses. Please point us to the specific paragraphs and language in the order providing the analysis to back up that conclusion.
  5. The FCC cites section 706 of the Telecommunications Act of 1996 as legal justification for its action in the net neutrality order. While we dispute the Commission's prior finding that broadband is not being deployed in a "reasonable and timely manner," section 706 states that in the event the Commission finds such a shortcoming, it is empowered to take action "to accelerate deployment of such capability by removing barriers to infrastructure investment." Please point us to the specific paragraphs and language in the order providing the analysis of how the rules remove barriers to infrastructure investment.
  6. The FCC has regulatory docket GN 10-127 open that presents alternative approaches to the net neutrality rul~s adopted last December. Now that the Commission has adopted an order, will you terminate the open proceeding on Title II regulation of the Internet and your "Third Way" proposal? If not, what purpose does retaining an open docket in those proceedings serve?

On March 7, Chairman Genachowski answered:

  • Paragraphs 11-42 of the Open Internet Order include a market analysis. As part of its market analysis, the Open Internet Order notes that many U.S. consumers have only a single option for fixed broadband providers, that the substantial majority have at most two options, that the future of competition in residential broadband is unclear, and that switching costs may be high. See Order paras. 32-34. These statements echo the filings of the Department of Justice (DOJ) and the Federal Trade Commission in this proceeding. See Order para. 42 & n.143. As the Commission explained on page 19 of the Order, it was not necessary for the Commission to make a formal determination of whether providers of broadband Internet access service possess market power "(b]ecause broadband providers have the ability to act as gatekeepers even in the absence of market power with respect to end users."
  • The Order weighs the costs and benefits of open Internet rules in paragraphs 38-42.
  • Paragraphs 13-16,38-42, III, and Appendix D of the Order analyze the impact of open Internet protections on jobs, investment, and the economy. Several commenters in our proceeding - including the Open Internet Coalition (which includes companies such as Amazon, eBay, Facebook, Google, Netflix, and PayPal) and broadband providers such as Clearwire - affirmed on the record that the Internet's openness is a critical component of its contribution to economic growth,
  • One of the primary purposes of the Open Internet Order is to ensure that small businesses can rely on the open Internet to start, to innovate and launch new products and services, to achieve efficiencies, to reach customers around the world, and to grow and create jobs. The Order concludes that open Internet rules will benefit small businesses, both online and offline, in part by ensuring that barriers to innovation and entry online remain low, and that the rules will have a minimal burden on small broadband providers, based on the analysis in paragraphs 11-42, and Appendix D. A number of small businesses commented in the record in strong support of open Internet protections.
  • In paragraphs 14,40, and 53 the Order analyzes how the open Internet rules remove barriers to infrastructure investment. The Commission's legal authority under section 706 is discussed in paragraphs J 17-123.
  • Less than a year ago, the Commission issued a Notice of Inquiry in its proceeding entitled Framework/or Broadband Internet Service. The first sentence of that Notice explains that that document began "an open, public process to consider the adequacy of the current legal framework within which the Commission promotes investment and innovation in, and protects consumers of, broadband Internet service." The Notice broadly seeks public comment on many questions about legal and policy issues relating to broadband, without proposing any particular agency action.
  • The Broadband Framework record remains open to collect information that may be helpful for the Commission's work and that could serve as a resource for an update of the Communications Act, as many in Congress and the private sector have suggested is needed.

Chairman Genachowski's Response to Follow-up Open Internet Questions Letter (Chairman Upton et al)
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House Republicans are pointing to the bipartisan support of their network neutrality repeal effort — one of the most partisan issues before the House Commerce Committee this year.

The committee's top telecom leaders circulated a "Dear Colleague" letter on Monday with five names on it — two of them are Democratic Reps. Collin Peterson (MN) and Dan Boren (OK). The letter asks members to support a resolution that would repeal the net-neutrality regulations passed by the Federal Communications Commission in December. Committee Democrats strongly oppose the resolution, arguing that rules are moderate and that the repeal approach is over-aggressive.


Peterson, Boren Add Support for network Neutrality Repeal Upton: Pair Of Dems Join FCC-Blocking Effort (B&C)
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Sen Al Franken (D-MN) said in a speech at the South by Southwest conference on that he is planning legislation that would amend antitrust laws to "call violations of net neutrality out for what they are: anti-competitive actions by powerful media conglomerates that represent violations of our anti-trust laws."

Sen Franken, one of the most vocal net neutrality supporters in the Congress, is taking an approach endorsed by some Republicans who say an antitrust approach to Internet openness might be appropriate. House Judiciary intellectual property subcommittee Chairman Bob Goodlatte (R-VA) has said he may also introduce a bill to amend antitrust laws to address net neutrality.


Sen Franken to push bill that would make violations of net neutrality a crime Sen. Franken: 'We Can't Lose Net Neutrality' (Huffington Post)
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Netflix, Google and other Internet content streamers are running headlong into growing resistance from broadband service providers to let them transport huge amounts of content over carrier pipes without paying higher fees.

The GSM Association even has chimed in to say that such content companies should help pay for network builds if they are going to use so much of the network capacity. Meanwhile, Netflix is battling the resurging movement toward usage-based billing for broadband networks. Whether you think it makes sense for streaming giants to pay telcos and other broadband service provider higher fees for their swelling traffic, you have to wonder if the Internet juggernauts are eventually going to start looking at other options. For instance, is there a point when, rather than face increasing carrier fees and adoption of usage-based billing, it would make more sense for companies like Netflix, Google, HBO and others to get together and either buy or build their own networks?


Netflix, Google: Would you rather pay higher fares to ride other networks or buy/build your own?
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AT&T will begin to cap DSL data usage for its Internet customers and implement charges for anyone who goes over the limit.

The company said that customers who exceed a monthly limit of 150 gigabytes of data in three separate months will be charged $10 for every extra 50 gigabytes of data they consume. Customers on AT&T's higher-end U-Verse Internet service have a limit of 250 gigabytes. AT&T will impose the new limits on May 2. AT&T's move represents an expansion of its policy to charge based on usage, following last year's move to a tiered pricing structure for wireless data. The service providers have been juggling the explosion of demand for video, gaming and other bandwidth-intensive applications running across the networks with the cost to ensure there is sufficient equipment to handle the traffic smoothly. As in last year's mobile-pricing shift, AT&T says the latest change in policy is to ensure the quality of the customer experience. AT&T said that it will alert customers multiple times if they are near the limit or exceeding it, including notifications when a customer hits 65%, 90% and 100% of their monthly allowance. Similar to its wireless service, the carrier would provide tools to allow customers to check on their usage. The carrier said the policy will affect less than 2% of the company's customer base. AT&T plans to notify customers of the change later this week.


AT&T Web Customers Face Data Cap
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AT&T's plan to impose monthly usage caps on wireline broadband customers -- and charge overage fees for additional data -- may provide "air cover" for large U.S. cable operators to do the same, according to Sanford Bernstein senior analyst Craig Moffett.

In a research note, Moffett said he expects U.S. cable operators to follow AT&T's move by introducing pricing plans that include caps for lower-end packages and surcharges for additional usage. The first MSOs likely to do so are Charter Communications, Cox Communications and Time Warner Cable, with Comcast "the least likely to move in the short term," he said. "AT&T's move provides air cover that makes it easier for all of them to follow," Moffett wrote, adding, "We view the move as good news for all the terrestrial broadband operators."


Cable Likely To Follow AT&T Into Usage-Based Broadband Pricing: Analyst
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Claims of congestion are notoriously hard to validate from outside the network, but industry analyst Dave Burstein does extensive writing about and consulting for various ISPs; he fired off a tweet this morning saying that AT&T "lied" to the Wall Street Journal.

"Congestion is minimal," Burstein said. AT&T's DSL network does not rely on a shared local loop like cable uses (something which used to cause problems when everyone in a neighborhood arrived home from work and hopped on the Internet). In a DSL network, every home has a separate line to the central office, where it connects to an aggregator called a DSLAM and eventually leaves the building on a fiber connection to join regional and then national backbone traffic. Upgrading DSL networks to engineer around congestion problems can often be relatively inexpensive. Instead of deploying expensive work crews to dig trenches all over a town to fix last-mile issues, centralized upgrades of the DSLAMs and the backhaul connection can relieve local stress. Further upstream, congestion may occur at larger regional switches and routers. AT&T has not shared any detailed information on the nature, extent, and location of its congestion problems. Critics often charge that the big incumbent ISPs could simply make their bandwidth woes disappear with a bit more investment, a claim fed this weekend by news out of Britain that one of the largest ISPs there has just removed some bandwidth caps due to more infrastructure investment.


Is AT&T's new 150GB DSL data cap justified?
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How much Netflix video does 150 GB get you? Not that much, actually.

If you watch a movie like Moulin Rouge in HD, you’re going to use around 3.5 GB of data. A single episode of Weeds equals about 800 MB when watched in HD. If you were going to use all your 150 GB of AT&T bandwidth to watch HD video from Netflix, you'd only be able to watch about three hours per day — and that’s without doing anything else. Nielsen recently estimated the typical customer is streaming around 11 hours of video from Netflix’s website per month. However, Nielsen’s data is based on PC and laptop usage only and doesn't include any streams accessed via iPads, Roku set-top boxes, Blu-ray players or any of the other 250 devices Netflix’s streaming service is now available on. These devices have arguably been the biggest driver for the company’s online video growth, and they’re likely to also have a significant impact on many people’s bandwidth consumption. Granted, all of this is pure back-of-the-envelope math. Real-life usage involves data transfer overhead, which eats up additional bandwidth. Then again, only a portion of the Netflix catalog is actually available in HD. Many TV shows are, but a good number of movies can only be watched in SD, which doesn't eat up quite as much bandwidth. Still, AT&T’s bandwidth cap could have a significant impact on the future of the service.


AT&T’s New Bandwidth Cap Is Bad News for Netflix
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The House Republican Technology Working Group announced additions to its leadership as the group prepares to unveil its technology agenda in the coming weeks.

Chairman Bob Goodlatte (R-VA) announced Rep. Cathy McMorris Rodgers (R-WA) and Michael McCaul (R-TX) will be joining Rep Lamar Smith (R-TX) as vice chairman of the working group, which will set the lower chamber's agenda for technology legislation this Congress. The working group is planning to unveil its agenda in the coming weeks with a focus on cybersecurity, patent reform, expanding free trade agreements and increasing enforcement of intellectual property protections. Noticeably absent from the list of priorities are issues such as expanding broadband Internet access that are prized by the Obama Administration. House Republicans have already moved to repeal the Federal Communications Commission's network neutrality rules and have heavily criticized stimulus funds used for broadband grants.


House GOP reorganizes tech working group
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The publisher and CEO of the Los Angeles Times says it's important that the Tribune Co. emerge from bankruptcy protection as soon as possible. Eddy Hartenstein testified that the cloud of bankruptcy is hurting Tribune's ability to keep and attract employees and to forge partnerships to help it compete in the rapidly changing media industry. Hartenstein was the final Tribune witness in a hearing to determine whether a Delaware judge will approve the company's reorganization plan. Noteholders who have submitted their own plan will present their case later.


Tribune Company calls last witness in reorg plan hearing