Tuesday, April 6, 2010

Court: FCC has No Power to Regulate the Tubes


The giant telecom and cable monopolies that control 99% of U.S. broadband services won a big battle with the FCC earlier today.

A three judge panel in Washington overturned a 2008 FCC ruling that barred cable and phone giants from blocking customers’ access to Internet technologies such as Voice-over-IP (VoIP) and Peer-to-Peer (p2p) file sharing.  The ruling comes as a blow to proponents of Net Neutrality regulations.

In the past AT&T executives have tried to claim that companies like Google, HULU, and Apple are stealing bandwidth from them by allowing their customers to get email, perform web searches, and and stream audio or video without paying AT&T special access fees. 

Currently the Internet is modeled in a peering system where consumers pay Internet Service Providers (ISPs) for access to the Internet and Internet services companies like Google pay ISPs for access to the Internet enabling companies and consumers to reach each other.  Now that the FCC ruling has been overturned, proponents of Net Neutrality believe telecom giants like AT&T will move to begin double billing companies like Google and Apple by making them pay additional fees for access to their customers.  Some believe things could get even worse and companies services could be blocked entirely from telecom and cable giants’ networks.

“We’ve run into this very problem with cable providers in Kansas City,” said James Nelson, President of KCnet, Inc. a independent Internet Service Provider that’s been providing access since 1995. “In addition to our high-speed Internet services we offer digital phone service or Voice-over-IP.  The cable companies also offer a similar service but at substantially higher cost. As a result we’ve been able to attract many cable Internet customers to our VoIP service.”

“Needless to say, these companies haven’t liked this and have from time-to-time blocked their customers’ ability to access our VoIP services,” continued Mr. Nelson.  “Because of the nature of the blocks these companies employ, it is nearly impossible to prove when they are occurring.”

“A lack of Net Neutrality regulation and enforcement has resulted and will continue to result in increased costs for consumers and decreased competition in the access market space,” he concluded.

The U.S once led the world in broadband adoption, today the country ranks 15th and is sliding rapidly largely due to monopoly control of the Internet infrastructure and the pipes that deliver next generation speeds to consumers.

Proponents of Net Neutrality now believe the only option the FCC has is to force cable and telecom giants to provide wholesale, unrestricted access to their networks in much the same way they currently do with telephone services.  Others believe the Justice Department’s Antitrust Division should embrace a national highway or Interstate type system for delivering the Internet to consumers where the government would step in and break up telecom and cable giants by splitting their infrastructure layer from their services layer in order to create one new regulated company that controls all the pipes in the ground and wireless spectrum in the sky and leaving all other companies to compete in the free market for the services delivered over those lines.

Until the FCC or congress acts, companies like Comcast and AT&T will be able to block and/or restrict the sites and services their customers can access on the Internet.

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