The Tulsa Forum by TulsaNow

This is good.  The administration has to go back to the drawing board on their plans to impose taxation and regulation on internet usage and commerce.  We get to keep our free internets for a while longer.

WASHINGTON (AP) -- A federal appeals court has ruled that the Federal Communications Commission lacks the authority to require broadband providers to give equal treatment to all Internet traffic flowing over their networks.

It marks a serious setback for the FCC, which needs authority to regulate the Internet in order to push ahead with key parts of its massive national broadband plan.

Wow,

I work in a related industry, and I have to tell you that your understanding of this issue is WAY off base and this is a very bad, very anti-competitive (anti-capitalistic) ruling.

Let's say an Internet provider, let's say AT&T, doesn't like you using Vonage for phone service. Done, Vonage can't be used on AT&T's network. You would have to buy phone service from AT&T. Let's say they sign an exclusive deal with Bing to provide search on their network. Boom, Google and Yahoo are gone.

The campaign promise......
October 29, 2007 2:29 PM PDT
Obama pledges Net neutrality laws if elected president
http://news.cnet.com/8301-10784_3-9806707-7.html

The campaign promise fulfilled....
FCC Backs Net Neutrality — And Then Some
By Ryan Singel  September 21, 2009
http://www.wired.com/epicenter/2009/09/net-neutrality-announcement/#ixzz0kKyKjOoZ

Interesting.  In this throwaway article (http://www.pcworld.com/article/193557/court_rules_against_fccs_comcast_net_neutrality_decision.html) at PC World about the decision, it says:

"The U.S. Court of Appeals for the District of Columbia Circuit, in an order Tuesday, overturned the FCC's August 2008 ruling forcing Comcast to abandon its network management efforts aimed at users of the BitTorrent p-to-p service and other applications. The FCC lacked "any statutorily mandated responsibility" to enforce network neutrality rules, wrote Judge David Tatel."

If the FCC can't enforce Net Neutrality, who can?  

I was just going to point this out. Gaspar seems to be glad the FCC lost the judgment, but then says "We get to keep our free internets for a while longer." The opposite is true. While swake's examples are extreme, they are the worst case scenario for what the ruling entails.

Funny.  Yes the proposal uses great words like "equality" and "neutrality,"  but at the heart of the purpose is section 4.20 where they want to establish a guideline for the taxation of internet use and commerce.  

This small provision has more meaning than anything else in the proposal.  It grants new powers to the FCC, and therefore the administration to impose a tax structure on the Net.  Once this door is open, I think even those of us most susceptible to lib-speak understand the overall goal.  Trillions of dollars in untapped taxes become available to government.

Sure, there is a lot of bate hiding this hook.  It's been a goal of the FCC for a long time and with this admin they see their chance.

4.2 DEVICES
Innovative devices fundamentally change how people use broadband. Smartphones have allowed millions of Americans to use mobile e-mail, browse the Internet on-the-go, and—more recently—to use hundreds of thousands of mobile applications that did not exist a few years ago. Before smartphones, personal computers with graphical user interfaces and growing process¬ing power enabled the emergence of the Web browser, which led to the widespread adoption of the Internet.
Competition, often from companies that were not market leaders, has driven innovation and investment in devices in the past and must continue to do so in the future. When one exam¬ines the three main types of devices that connect to broadband service provider networks—mobile devices, computing devices and set-top boxes—one finds that there are many mobile and computing device manufacturers offering hundreds of devices with a dizzying assortment of brands, features and price levels. Whole new device classes, such as tablets, e-book readers and netbooks continue to emerge, shifting firms’ market posi¬tions and enabling entrants to capture market share. Mobile devices are rapidly incorporating technology such as Global Positioning System, accelerometers, Bluetooth, Wi-Fi, en¬hanced graphics and multi-touch screens. By any measure, innovation is thriving in mobile and computing devices.  The same is not true for set-top boxes, which are becoming increasingly important for broadband as video drives more broadband usage (see Chapter 3).96 Further innovation in set-top boxes could lead to:
hGreater choice, lower prices and more capability in the boxes, including applications.97
hMore competition among companies offering video content (MVPDs).98
hUnlimited choice in the content available—whether from traditional television (TV) or the Internet—through an integrated user interface.99
hMore video and broadband applications for the TV, possibly in conjunction with other devices, such as mobile phones and personal computers (PCs).100
hHigher broadband utilization.101
Congress wanted to stimulate competition and innovation in set-top boxes and other video navigation devices in 1996 when it added Section 629 to the Communications Act. Section 629 directed the FCC to ensure that consumers could use commercially available navigation devices to access services from MVPDs.102 Lawmakers pointed to innovative uses of the telephone network, related to new phones, faxes and other equipment, and said they wanted to create a similarly vigorous retail market for devices used with MVPD services.103
The FCC adopted its First Report and Order to implement the provisions of Section 629 in 1998.104 The order established rules requiring MVPDs to separate the system that customers use to gain access to video programming, called the conditional element, from the device customers use to navigate the pro¬gramming. Section 629 nominally applies to all MVPDs. The FCC, however, has applied its rules only to cable operators. It either directly exempted other MVPDs, such as satellite TV operators, or implicitly excluded them by taking “no action” against an operator.105
Operators and other stakeholders agreed on a proposed solution for cable—called CableCARD—to separate the con¬ditional access element. The CableCARD is about the size of a credit card and roughly similar in function to the Subscriber Identity Module (SIM) card used in mobile phones. Cable operators supply the CableCARD, which is inserted into a set-top box or television set that a consumer buys at a store to authenticate the subscriber. To ensure adequate support for CableCARDs, the FCC required cable operators to use CableCARDs for set-top boxes leased to consumers.
The first devices from third-party manufacturers using CableCARDs hit the retail market in August 2004, six years after the FCC’s First Report and Order. Three years later, in July 2007, cable operators began using CableCARDs in their leased set-top boxes.106Despite Congressional and FCC in¬tentions, CableCARDs have failed to stimulate a competitive retail market for set-top boxes. The top two cable set-top box manufacturers in North America, Motorola and Cisco, together captured a 95% share of unit shipments over the first three quarters of 2009. That’s up from 87% in 2006.107 A national or global market with relatively low costs of entry, like that for many consumer electronics markets, should support more than two competitors over time.108The two companies continue to control both the hardware and the security on the cable set-top box through their proprietary conditional access systems. By contrast, the top two cable set-top box manufacturers in Europe, the Middle East and Asia (EMEA) where open stan¬dards are used for conditional access accounted for a market share of approximately 39% between 2006 and the third quarter of 2009.109 There are 0.5 million CableCARDs deployed in retail devices today,110 which represents roughly 1% of all set-top boxes deployed in cable homes.111 Only two manufacturers, TiVo and Moxi, continue to sell CableCARD-enabled set-top boxes through retail outlets.
Other alternatives are starting to emerge. For example, several innovators are attempting to bring Internet video to the TV.112 Their devices often cannot access traditional TV content that consumers value—content that is not available or difficult to access online. Without the ability to seamlessly integrate Internet video with traditional TV viewing, Internet video de¬vices like Apple TV and Roku have struggled to gain a foothold in U.S. homes.113
Retail set-top boxes have been competing on an uneven playing field. The barriers have been well-documented in mul¬tiple proceedings114 and have prompted some companies not to enter the market at all.115 To level the field, the FCC should adopt the recommendation that follows. To maximize the likelihood that the recommendation will succeed, it should ap¬ply to all MVPDs. Extending the rule to all MVPDs will enable consumer electronics manufacturers to develop products for a larger customer base and allow consumers to purchase retail devices that will continue to function even if the consumer changes providers. Today, four out of the top 10 MVPDs are not cable companies and represent 41% of MVPD subscribers.116

This is good. 

Would probably not be of as much concern under any other administration, but we know that the push in this proposal is not the neutrality issue, but the tax issue.  

I have no problem with companies doing battle over bandwidth.  Those that engage in ruthless tactics will ultimately pay the price.  Internet commerce and the battle for bandwidth has worked this way for years.

For most of those years, there has been healthy competition in the eyeball networks. Now there is not.

Secondly, this issue was also pushed by the previous administration's FCC, it's not new by any means. Keep digging that hole..

It is true that “Congress gave the [Commission] broad
and adaptable jurisdiction so that it can keep pace with rapidly
evolving communications technologies.” Resp’t’s Br. 19. It
is also true that “[t]he Internet is such a technology,” id.,
indeed, “arguably the most important innovation in
communications in a generation,” id. at 30. Yet
notwithstanding the “difficult regulatory problem of rapid
technological change” posed by the communications industry,
“the allowance of wide latitude in the exercise of delegated
powers is not the equivalent of untrammeled freedom to
regulate activities over which the statute fails to confer . . .
Commission authority.” NARUC II, 533 F.2d at 618 (internal
quotation marks and footnote omitted). Because the
Commission has failed to tie its assertion of ancillary
authority over Comcast’s Internet service to any “statutorily
mandated responsibility,” Am. Library, 406 F.3d at 692, we
grant the petition for review and vacate the Order.
So ordered.

We know that the push in this proposal is not the neutrality issue, but the tax issue.  

I am not convinced free enterprise is going to make everything peachy. As said before we only have two real ISP's in Tulsa and the US is one of the slowest in the world when it comes to internet availability and speed. The same companies giving us limited competition and slow speeds are wanting to control what you access and eliminate "unlimited" plans in favor of going back to cost per mb.

(http://www.worldpoliticsreview.com/Images/commentarynews/broadbandspeedchart.jpg)

Like it or not, high speed internet cannot be considered an open enterprise. If AT&T and COX decide to block youtube, then no-one in Tulsa gets youtube. There is no ability to switch to "vote with your dollars."

If a market exists a marketer will emerge.  This is only false in regulated systems where market offering is determined by outside entities (government).

Page 58
RECOMMENDATION 4.20:  The federal government should investigate establishing a national framework for digital goods and services taxation. 
      The National Broadband Plan is focused on increasing beneficial use of the Internet, including e-commerce and new innovative business models.  The current patchwork of state and local laws and regulations relating to taxation of digital goods and services (such as ringtones, digital music, etc.) may hinder new investment and business models.  Entrepreneurs and small businesses in particular may lack the resources to understand and comply with the various tax regimes. 
      Recognizing that state and local governments pursue varying approaches to raising tax revenues, a national framework for digital goods and services taxation would reduce uncertainty and remove one barrier to online entrepreneurship and investment.

I see that now, it's recommendation 4.2, not section.

But this is just calling out the method of taxation and standardizing it. I don't see anything sinister here.

Do you think that a standard method of internet taxation will not be acted on immediately?

I anticipate it will take about 2.1 seconds for the bills to flood congress, and another 1.6 seconds for the 4,000 page internet tax bill to be written. 

With the door cracked open to trillions in taxable transactions, Pelosi will be on this faster than Al Gore's G5 flying over Texas.

the internet can be taxed at any time today, all it takes is a decision by congress to do it. This does not change that, it just makes taxation easier on the entity being taxed.

Sure it does.  Opens the market to a competitor.  May take time for that competitor to emerge, but it does open the market.  EasyTel, Version, GrizzleTel, someone would move into the vacuum.  

It's like if McDonald's decided not to offer French fries any more in a town where there was only one burger joint (a McDonald's).  Someone would take advantage of the "engineered" competitive weakness.

If a market exists a marketer will emerge.  This is only false in regulated systems where market offering is determined by outside entities (government).

God, I'm tired of beating this horse.

There is no ability to switch to "vote with your dollars."

Nothing is free and when one door closes another opens. Since more sales are being made online without taxes being collected, I am in reality paying less taxes. Everyone who buys online is. That's great for some, a loss for others. But think about this. Should I decide to buy a magazine at the book store, I pay a tax on it. Yet, when I obtain that same text through the magazine's website, I do not. The price at the local bookstore also includes the city property taxes, license fees, etc. that goes towards improving streets, protecting the public etc. The website does not. They make their money from advertising I suppose. Isn't that patently unfair to the bricks and mortar store who committed to my community?  Aren't they sucking the life out of my community by avoiding the traditional costs of doing business?

So, why is this form of retailing being pleasured with no taxes? Markets change and the way we do business changes but death and taxes are always the cost of life. Why do you want these giant companies to monopolize AND get a free ride?

Wow,

I work in a related industry, and I have to tell you that your understanding of this issue is WAY off base and this is a very bad, very anti-competitive (anti-capitalistic) ruling.

Let's say an Internet provider, let's say AT&T, doesn't like you using Vonage for phone service. Done, Vonage can't be used on AT&T's network. You would have to buy phone service from AT&T. Let's say they sign an exclusive deal with Bing to provide search on their network. Boom, Google and Yahoo are gone.

I think we're damned if we do and damned if we don't.   AT&T restricting what sites you can go to, or giving the Feds regulatory rule over the internet.  I fear the latter more because it opens the door to banning free speech on the internet.  AT&T is a business, and if you don't like their business practices, you can take your money elsewhere.

As I said before.. you can't. It is very possible that cox's cable network passes through AT&T fiber at some point so if AT&T cuts off vonage you are just up a creek. That's it.

Are there examples of this happening?

Are there examples of this happening?

Are there examples of this happening?

At the moment it is conjecture as the big telco's have been investigating "internet prioritization and filtering" as another way of making money off the pipes they already charge people to use. They've been testing the waters to see if the feds will block them.

Would it be in their interests to screw their customers though?

Bunch of coxblockers.