Bill Moyers: Obama’s Latest Assault on Democracy – Undermining Net Neutrality

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“Net neutrality” is one of those brilliant coinages, like chained CPI, with a technocratic sheen designed to deter ordinary citizens from taking interest in policy proposals of fundamental importance to them.

Bill Moyers interviews David Carr of the New York Times and Susan Crawford, a visiting professor at Harvard Law School, about the how the biggest service providers like Comcast and Verizon have been pushing hard to balkanize the Internet by creating more stratified service tiers based on speed of access. This change is anticipated to hurt both lower income consumers and specialized websites, like not-for-profits, cultural and scientific sites, and…independent blogs.

So who did Obama put in charge of the FCC? Tom Wheeler, a former cable lobbyist. And of course, Wheeler hand-waves and professes that he just can’t oppose those powerful operators, he lost in court. Susan Crawford debunks that idea:

BILL MOYERS: And Tom Wheeler says that, look, the FCC’s tried twice to rewrite the rules of Net neutrality. And the appeals court, federal appeals court, has turned thumbs down twice. He’s saying, I’m only doing what I can do to write rules that are consistent with what the court has said.

SUSAN CRAWFORD: What’s not right about that is that he can do something. The FCC has tried to simultaneously deregulate by not labeling these guys as utilities. And yet, adopt Net neutrality rules. All he has to do is relabel these services as utility services. And then he stands on firm legal footing. He can forebear from any details of those rules. He doesn’t want to apply. The courts have struck this down because it’s incoherent. That’s the problem. If he marches forward on a clear legal path, he’ll be fine. But he wants to avoid World War III on the cable institutions.

So the real issue isn’t that public interest couldn’t prevail but that the Administration isn’t about to declare war on communication providers. And this almost-certain death net neutrality isn’t bad just in terms of diversity of content and democratic processes, it’s also bad for the health of the Web as system. The intent is to produce a more balkanized Internet, with the various local monopolist creating nodes that they increasingly control. Craig Heimark’s remarks in a recent post on high frequency trading apply here:

The old exchange system was a hub and spoke model, which was a stable system architecture. The internet was an outgrowth of a DARPA project to make a communication system so decentralized that it could not be taken out by a nuclear strike. Hub and spoke models are stable, but subject to an outage, say by a nuclear bomb or electrical failure. What chaos theorists have found is that highly decentralized networks are stable, as are single node networks (like exchanges), but that slightly decentralized networks are fragile…So regulators have left investors with the worse possible market structure.

And they are about to do that to the Internet.

Please call or write your Congresscritters, particularly if they are up for reelection this November, and tell them that this is a make-or-break issue as far as your support of Democratic party candidates is concerned.

You can read the transcript here. Please circulate this video widely.

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  1. Chuck Schumer

    Don’t forget, I recused myself from any anti-trust hearings because my bother is in line to make millions off the Time Warner/ Comcast deal.

    They kept saying I’d never run from a TV camera!

  2. ewmayer

    The one cogent argument I’ve seen for tiered net access is what might be called the “Netflix free-ride business model” argument, as laid out by econo-blogger and former ISP owner Karl Denninger here.

    Now note, KD can come across as a bit of a nut on other issues (e.g. gun control, Obama birth certificate) but on matters economic and net-related I’ve generally found him quite sound. Would appreciate readers’ take on the Netflix-illustrated aspect of the neutrality issue.

    1. Dirk77

      Yes. I thought that net neutrality was about not being able to discriminate for content. You can and must charge for bandwidth though. So I’m confused about the second paragraph of this article.

      1. Yves Smith Post author

        You haven’t lived in a place like Australia where bandwidth use is metered in a MUCH more serious way than here.

        And I have several friends who’ve run ISPs. They say unequivocally that “bandwidth costs” is nonsense. They’ve told me if you know how to run a network, bandwidth is essentially free except intermittently at peak times. You’ve got an investment in overheard and pretty much fixed running costs, but the INCREMENTAL cost of more bandwidth/service over that network is nada. That makes pricing arbitrary (beyond a minimum dollar per month amount per account to cover your amortized installation costs, billing, customer service, and losses for bad credits).

        If this was really about network management issues, you’d simply see contracts that would allow some people to have fast speeds at all times, and other customers to be down-regulated at peak times IF overall network traffic required that. Peak times for home users are early evenings on weeknights.

        This is really a Trojan horse for implementing walled gardens like the old AOL. The monopolists also would like to charge content providers for preferential access, or alternatively, to sell users packages that might provide “basic service” on cable (generally low speeds) but let them get some content faster (like preferred sports and news and shopping sites). I haven’t poked enough around the thinking among those who are concerned about how this might pan out (as in the interaction between the rules and the planned speed/content tiering) but I know generally this has been an industry plan the Net neutrality folks have been fighting since the SOPA/PIPA days.

        Even if the industry has a point about Netflix, that’s tantamount to using partial birth abortions to argue that all abortions should be banned. Frankly, I have to believe the reverse, that Netflix is a Godsend because it allows the cable and DSL companies to sell those super high bandwidth packages no one would buy otherwise.

        The insane part is the broadband pipes to local users are natural monopolies/oligopolies. They were always supposed to operate like utilities, even though the FCC is afraid to use that word. These guys got these licenses with the understanding they’d be regulated in terms for getting franchises with no downside if they built them out and managed them competently. It was always understood that in exchange for getting such a secure, easy profit stream that they’d be subject to rules, like open access, pricing so as to serve the community (not abusing their monopoly position; meeting certain service standards; if needed, taking less profit on low-tier customers, etc). But that isn’t good enough for them. Now they want to rewrite the rules on an arrangement they went into happily and has worked our extremely well for them in order to wring more profits out of customers.

        Please listen to the video or read the transcript. The monopoly providers like Comcast are using what sounds like a reasonable argument as stealthy plan to remake the Internet into an even bigger profit machine for them to the detriment of users.

        1. Mark P.

          Yves –

          [1] Something that really, really needs to be stressed in regards to the perniciousness of the bandwidth argument is that the US has some of the slowest internet speeds in the developed world simply because stateside ISPs like Verizon, Comcast, etc. are making 95 percent profits and putting no investment back into building out/modernizing their infrastructure.

          [2] It’s cheaper for them to buy the Obama administration. As you write, their desired end-game is a multi-tiered Internet with: “…walled gardens like the old AOL …charging content providers for preferential access, or alternatively, selling users packages that might provide “basic service” on cable (generally low speeds) but let them get some content faster (like preferred sports and news and shopping sites). “

          1. Dirk77

            I had heard the our life of effectively unlimited bandwidth, courtesy of all the fiber laid in the Internet bubble, was coming to an end. But you say that is because the backbone providers haven’t upgraded since then? It seems odd that backbone providers are not treated as regulated utilities. Okay, I’ll watch the video when I get a connection with enough bandwidth (seriously).

        2. OpenThePodBayDoorsHAL

          Just an update on Australia since you lived here Yves, I get 3.9 MBS, unlimited quantity, plus a landline, for AUD $59.00 per month, which is about USD $50.00. My friends in the US say that’s pretty good.
          I don’t think I can stand any more stories about just how unspeakably awful Obomba is, and how utterly he has betrayed everyone who voted for him. Hilary will be even worse. That’s why I left the country.

          1. impermanence

            Actually, you’re getting ripped-off. I get 30mbs from the local cable monopoly for about US$45. in Southern California, where EVERYTHING is absurdly expensive.

    2. lolcar

      Anyone coming out with stuff like “That’s Communism, by the way, if you want an economically-accurate word for it.” discussing net neutrality wouldn’t know economically accurate if he tripped over it in a brightly-lit room. Stopped reading at that point.

    3. Ellie Kesselman

      I read the Karl Denninger post. He is NOT a nut on other issues e.g. gun control, Common Core. He does have an ISP’s view on net neutrality though. Some services need to be utilities. It isn’t Communism! Without any utilities or government, we’ll be back to 14th century feudal lords, vassals and serfdom, quickly. Karl thinks monopolies are okay. He’ll be interested in rumors of AT&T acquiring DirectTV.

      Even the advertising industry is concerned, see FCC Considers Allowing Online Fast Lanes:
      “if ISPs prioritize content from companies like Netflix, then other content — most likely from smaller businesses that can’t pay the extra tolls — will arrive more slowly….(in January) the D.C. Circuit Court of Appeals struck down rules that prohibited all broadband providers from blocking or degrading content, and engaging in unreasonable price discrimination.”

      Only big businesses will be accessible, quickly. Not bloggers, start-ups, nonprofits, churches etc. Keep this in mind too: Wheeler has been a career lobbyist for the cable TV and cell phone industry, and a major Obama campaign funding activist. Wheeler is a regulator, captured. His likely motive is to facilitate broadband ISP control of Internet access through price discrimination. He’s typical of Obama’s crony capitalist appointees.

  3. jgordon

    I wonder how proxy servers and VPNs will affect this new tiered internet.

    Anyway, I have been thinking lately that the internet back in the 90s was pretty damned awesome. I have to a lot of work to my browser and some modification of my OS just have a similarly productive experience with the internet these days. Maybe all of this bandwidth choking that will soon be going on at the behest of ISPs will encourage more people to adopt tor and more websites to go back to a strictly text/limited picture graphics way of doing things. Come to think of it, I should find out if there are still any dial-up ISPs out there–I have a feeling they’re soon going to be competitive again.

    1. different clue

      Every Comcast-style ISP will figure out how much money Naked Capitalism can raise, and then charge MORE than that to permit Naked Capitalism to move on Comcast’s private pipes. That is how the Comcasts will prevent politically inconvenient content from moving anywhere at all. They will do the same to every permaculture site and video as well, for example.
      Will any pre-Comcast technologies even be permitted to exist for Internet to be “dialed-up” to?
      John Robb of Urban Guerillas once suggested figuring out how to send and recieve digitally-coded signals over the Ham Radio Network, against the day that access to every other transmission technology invented since Ham Radio is denied and forbidden.
      Then too, people could send letters back and forth via the Post Office. To prevent the Post Office from being exterminated in the meantime, everyone who pays their bills electronically should go back to getting and paying their bills by mail. Also, keep accepting and signing up for as much junk mail as possible, and that is no joke. How else do we keep the Post Office alive in the face of the government conspiracy to exterminate it? The Post Office is the only thing that will will be left once digital communications access has been completely forbidden to every inconvenient political thought or economic de-profitizing unplugging piece of advice.

  4. Raven

    A question: Verizon is willing install a fiberoptic cable from the pole to my house for “free.” This would not be in a conduit, but buried underground, because we have no telephone poles on our property, just underground service, and what we have is not in a conduit. This has got to be costly to them (and make a mess of my yard). They call us constantly and say that we should take them up on their offer because at some point in the not too distant future they plan to abandon the copper wire telephone system. The question is, once they abandon their existing phone system, does this free them from being a regulated utility. In other words, since they’re not regulated now for cable TV and Internet service, once their system is entirely on fiberoptic cable, will they be regulation free? And could this be their intent and motivation for doing so?

    1. Yves Smith Post author

      I am pretty sure not, but I defer to others.

      You can and should insist that they not disconnect your copper. That’s an option you have. Most people who sign up for fiber optic don’t know that and regret it.

  5. NotTimothyGeithner

    The Obots will have a hard time spinning this to the growing number of non-cable users. I imagine the geeks at slashdot will lose their minds, but this is the kind of thing which will follow candidates. Seeing our political types try to answer will be a blast.

    1. El Guapo

      “The Obots will have a hard time spinning this”

      That won’t stop them from trying.

  6. Mitch Shapiro

    I submitted a comment at Wheeler’s FCC blog in response to his recent post explaining-defending his proposed rules, and thought it might be helpful to this discussion thread. As with some (but not all) other issues, I see a difference between a Republican and Democratic-controlled FCC on net neutrality-related issues, but perhaps not a sufficiently large one in this case. My sense is that this distinction is not widely shared within the NC community, but I believe it’s true in this particular case. But I also agree with Susan that Wheeler can and should simply reclassify Internet access as a common carrier, something that the recent court decision (by a conservative panel of judges) suggests will pass muster with the courts.

    Here’s my comment on Wheeler’s blog post and the “pay for fast lane” proposal it was defending, followed by some suggestions on how we might continue and focus this fight:

    “My concern is that we’ll see the “boiling frog” phenomenon take place, with:

    1) the gap between “fast lane” and “standard Internet” speeds getting bigger and bigger (e.g., as demand for higher-quality extremely bandwidth-hungry video services expands);

    2) dominant ISPs continually pushing the envelope regarding the still-not-defined “commercially reasonable” standard and looking for ways to game/disarm the transparency requirements and;
    3) contrary to what chairman Wheeler seems to assume, ISPs relentlessly using the courts to delay or destroy meaningful FCC implementation of his proposed rules (which they’ve done with most every meaningful regulatory regime that doesn’t suit them).

    In addition, this approach relies on aggressive implementation of “transparency” and “reasonableness” rules by an FCC which in some future years will be controlled by an anti-regulatory Republican majority. That’s certainly not a comforting prospect.

    I suspect chairman Wheeler wants to get this off the front burner so he can have sufficient political maneuvering room to take action on other fronts (e.g., spectrum).

    But I’m not confident this will occur, since the history of the giant ISPs suggests they seek dominance on every front in which they operate. They were, after all, born and bred as monopolists, whether as Bellheads or “cable cowboys” who fancied themselves risk-taking entrepreneurs, but, like broadcasters before them, had simply been smart or lucky enough to invest early in what was essentially a license to print money.

    But this post does seem to at least shed some light on chairman Wheeler’s thinking and motivation, which I don’t see as a ‘sell out” so much as an incremental risk-avoidance strategy that I don’t think will succeed in achieving the goals he says he supports. The dominant ISPs want what they want and they’ll do whatever they need to do to get it.

    I don’t think this approach will succeed. It will only impact the specific course of the evolution to a a two-tiered IP network: with one tier that increasingly resembles the “cable TV gatekeeper” model and consumes an increasing share of network capacity, and the other tier largely retaining the original principles of the Internet, but gradually fading in its attractiveness, as its relative share of network capacity and investment dollars dwindles over time (i.e., the Internet frog gets gradually boiled while ISPs margins, cash flow and shareholder returns—but not their network upgrade budgets–continue to grow at Wall Street-pleasing rates).

    Switching subjects a bit, I hope the chairman actually follows through in a meaningful way regarding federal preemption of anti-muni-net state laws, though it’s not clear to me if and how that will be done. And I hope that he goes beyond that step, to actively support such networks, since they strike me as the only current option for introducing meaningful and sustainable facilities-based competition in the very-high-speed segment of the local access market. And, based on the FCC’s own data, it’s clear that such competition does not exist today.”
    With regard to this last point about muni-nets (which Susan focused on in a recent NYT op-ed piece), Wheeler had this to say in a speech at the recent cable industry convention:

    “This latest news does not change the historical fact that, for many parts of the communications sector, there hasn’t been as much competition as consumers and innovation deserve. Given the high fixed costs and consequent scale economies, this isn’t especially surprising. But that makes it all the more important that we knock down public and private barriers to competition and avoid erecting new ones. It is equally important that we encourage competition wherever it is possible.

    One place where it may be possible is municipally owned or authorized broadband systems. I understand that the experience with community broadband is mixed, that there have been both successes and failures. But if municipal governments-the same ones that granted cable franchises-want to pursue it, they shouldn’t be inhibited by state laws. I have said before, that I believe the FCC has the power – and I intend to exercise that power – to preempt state laws that ban competition from community broadband.”
    In light of all this, I’d urge supporters of an open, ubiquitous, fast and affordable Internet to push hard and relentlessly:

    1) in opposition to Wheeler’s proposed “fast lane” rules and in support of FCC classification of Internet access as a Title II common carrier service;

    2) to make sure Wheeler aggressively follows through on his apparent promise “to preempt state laws that ban competition from community broadband.”

    3) to organize at the community level to at least explore the potential for establishing muni-fiber networks to provide a faster, cheaper and more responsive alternative to incumbent networks, even if the latter are subject to common carrier regulations (which, btw, the dominant ISPs/carriers will challenge endlessly in court, as they’ve done in the past);

    4) align with supporters of Modern Monetary Theory (MMT) to explore and propose options for increased federal support for expanded investment that would direct low-cost “patient” capital (e.g., including federal loans and/or loan guarantees and even grants in very low-density, high-cost areas) to support expanded and accelerated investment in community fiber optic projects and locally-developed programs to facilitate their usage and benefits (e.g., digital literacty and application-specific training; pilot projects in telehealth, education, open-government)

    5) to support increased FCC allocations of unlicensed spectrum, accompanied by policies that support combining this spectrum with muni-fiber networks to support open and low-cost fixed AND wireless access, while avoiding the risk that companies (and I’m thinking specifically about Comcast here) can use unlicensed spectrum as a tool to expand their dominance in the wired-access space into the wireless space (something I believe Comcast intends to do).

    6) continue to push back against bills like SOPA, which other NC readers know a lot more about than I do.

  7. jfleni

    RE: … Undermining Net Neutrality

    FCC/Wheeler: We will prevent States from limiting competition by favoring present duopolists.

    Outright lie! It could be done by the stroke of a pen, since the FCC has all the authority needed. Competition would explode (and badly needed profits to States/Cities/Counties) in a very short time. Barry Bubba and his DogPatch-DC posse will work to make sure it never happens to their good buddies passing on the bribes!

    FCC/Wheeler: Sorry Internet is an “information setvice”, not a “communication service” and the courts have said we can’t make the rules for them. This just plays word games with plain English, (with a latter-day Dred Scott decision to take the blame) and makes it so the plutocrats (and Barry) always win.

    “Anonymous” is tinkering with small cheap radios to set up private and untappable communication. Legally, this needs a licence of some kind, but Anonymous pays no attention at all to that, and retailers will never refuse the $50 bill to buy the radios. They are not there yet (so far it’s complicated and difficult), but that will certainly change rapidly.

    FCC rules covering “white spaces” have been carefully castrated (40 MILLIWATT limit – less than a dim indicator light) to ensure that this technology, so useful for local unlicensed Internet and video and other services, remains almost totally unused. Simple, cheap (?imported/throw-away and hidden) hardware could easily violate all the FCC rules, and a pox on the TV crats who want it to be otherwise. Tracing and enforcement is always possible, but would be very difficult.

    Prediction: Squashing the Internet by FCC and the DC Buttkissers might easily open a Pandora’s box of new highways, where everybody goes hundreds of miles an hour (so to speak), whenever they like. How will the “Netcrats” like that?

    1. different clue

      They will set up jamming towers all over America, just as the Communists set up jamming towers all over the USSR. But it is still worth trying, if only to force the CSSA government to make its true nature ever more obvious. (CSSA = Corporate Soviet States of America).

  8. Paul Niemi

    I think people are getting fed up with the cable companies, and it’s a ripe political issue. Not so long ago, you could sign a contract in a local office and get the service you wanted at a price. Then the local office disappeared, and you had to call India for service. Somehow then, the bills that arrived were higher than what you agreed to, and the package you ordered was less. Then in six months the cost of that package goes up dramatically. If you complain, they sell you a new package, but it always ratchets your cost higher down the road. If you dispute the billing, they will tell you the computer says you agreed to the higher price. If you call the FCC, they will say, “We no longer regulate them.” If you go to a city council meeting and complain, along with your neighbors, they will say they can’t do anything about it, and the cable company will forget to broadcast that particular meeting. Probably the most common ding on a person’s credit report is a disputed cable bill that wasn’t paid on time, and they send the bills to collection agencies at 30 days past due like clockwork. It is ruining people’s credit, and people are adopting pseudonyms to get the cable turned back on. It is a mess, and without net neutrality it would be a messier mess.

  9. diptherio

    We used to have a regulated monopoly power provider here in Montana, aptly named Montana Power. Back in the late nineties some absolute geniuses at the Power company thought ditching the regulated monopoly biz and going in to fiber-optic telecommunications would be a good idea. They proceeded to buy the legislature’s approval of such plan, as is customary in these cases, and got their de-regulation and permission to sell off the power-plants and dams to PPL and the transmission infrastructure to NorthWestern. Then they promptly went tits-up, leaving a whole lot of angry, suddenly pensionless, retirees in places like Butte. As an unhappy side result of this fustercluck scenario, our power bills increased dramatically.

    Haven’t figured out the moral of the story yet (perhaps, if Montana Power can’t compete with the oligopolists, who can?), but it seemed somehow relevant.

    1. Min

      Maybe the moral comes from Genesis: Don’t sell your birthright for a mess of pottage.

  10. Ed S.


    Concur with you (and have had nightmare dealings with Comcast).

    But there’s a simpler explanation: for $10/month + one time antenna cost (maybe $50) I get on-demand movies and 20+ local channels. (and I’m not getting into what Aereo might do). Or I can pay Comcast $125 for unlimited viewing of “Real Househusbands of Bozeman”. I’m going to have internet service anyway (and it IS a utility, just like electricity and water).

    Digital over the air antenna coupled with Netflix (and/or Amazon Prime Video and/or Hulu will KILL the cable content provider model.

    1. Paul Niemi

      Truth is, I rarely watch television anymore, but internet is vital to my ability to function. I used to get it from the phone company, until they made some switch and then there were outages every time it rained. They couldn’t fix it after several attempts. Then we went to cell phones only and got a cable modem. At first, cable internet was great, and it is a utility, but they just can’t stop fiddling with the speed and price. Pay more, get slower speeds, and junk TV to boot. However, if you get out in the community and talk to people, the cable company has really screwed with them. Now, I have over the air digital TV hooked up to my computer, and that switchover was a bust. They squished the bands together so law enforcement would have more channels. Now, every time a train goes through town or a big truck drives by, the signal swoons and you get artifacts. You can be a mile away from the transmitter, and it does the same thing. I think the best idea would be to just bring internet into everyone’s houses over the power lines, but that would upset things.

  11. inode_buddha

    Here’s what the cable cos really want the net to look like. It’ll look just like cable TV tiers…. IMHO since it all goes over (ultimately) Ma Bell’s backbone, they should all be told that they are going to be common carriers. They were *given* enough money to upgrade to fiber back in the 1990’s, etc. Taxpayer expense. It got turned into dividends and bonuses instead. Of course there are useful idiots who will be convinced that the US has the best internet in the world, since its the most expensive. Just like out medicine, amirite?

  12. Vatch

    There are 3 petitions relevant to net neutrality at :

    Maintain true net neutrality to protect the freedom of information in the United States. Still needs more than 54,000 signatures by May 24:

    Reclassify Internet broadband providers as common carriers. Needs more than 91,000 signatures by May 25:

    And, the most recent petition, Remove Tom Wheeler from his position as FCC Chairman. This still needs more than 99,000 signatures by June 1:

    I’ve signed all 3, but only one needs to reach 100,000 signatures to force the White House to make a formal reply. So if you’re short of time, just sign the first one, since it’s the one that has the best chance of reaching the goal.

  13. Jeff W

    In addition to circulating the video widely, I’ll be giving the people I send it to information about the comment process and make it easier for them to comment to the FCC.

    To send a comment to the FCC, people can use the special email address set up for that purpose, fill out the official comment form, or (perhaps easiest of all) submit a comment via Free Press. (Free Press has longer canned text, in what looks to be a previously-submitted petition, here—take your pick.)

    Consumerist has a piece on “Everything You Need To Know Before E-mailing The FCC About Net Neutrality,” which explains the comment process in more detail.

    People can also call FCC Chairman Tom Wheeler. (The link goes again to Free Press.)

    Bill Moyers’s site has “Additional Resources” (some of which are referred to above) at the bottom of this page “Don’t Let Net Neutrality Become Another Broken Promise” (which appears in the video as “How to Keep the Internet Open and Free”).

    Finally, a good primer on Net Neutrality can be found at Vox here.

  14. JM Hatch

    I’ve signed the White House petitions, but as to forcing a reply, they have failed to reply to many petitions that went well over the 100,000 mark. The petition to pardon Snowden reached 150,000 plus, and was ignored.

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