The House Commerce Committee has started mark-up of the Barton bill, legislation that will primarily create a national video franchise scheme. But, after having been shot down in the Telecommunications and Internet Subcommittte, ranking member Rep. Ed Markey (D-MA), along with a group of House Democrats, plans to take another run at amending the bill to include tougher net neutrality requirements.
In his opening statement, Markey said
Tomorrow’s network neutrality debate [amendments will be debated tomorrow] will present members with a choice. It is a choice between favoring the broadband designs of a small handful of very large companies or safeguarding the dreams of thousands of inventors, entrepreneurs, and small businesses. Tomorrow we will either vote to preserve the Internet as we know it, or instead, vote to fundamentally and detrimentally alter it.
The new amendment, supported by Rep. Rick Boucher (D-VA), Anna Eshoo (D-CA) and Jay Inslee (D-OH), is said to differ slightly from the previous amendment voted down in subcommittee. It states, among other more general things (e.g. broadband providers cannot block, degrade or impair content delivery, etc.) that if a broadband provider offers any kind of enhanced quality of delivery for any kind of data or service, it must offer the same priortization or enhanced quality delivery for all data of that type.
The Markey amendment also requires broadband providers to disclose any special deals they do strike. It further establishes a complaint process at the FCC, directing the Commission to develop regulations governing this process. The Commission is also required to resolve complaints within 30 days of submission.
Posted by Cynthia Brumfield at 7:49 PM | Print | Comments (0)Telecom giant AT&T issued its Q1 06 financial results today showing continued strong gains in both DSL and mobile customers. As to the company’s financials…well, it’s hard to say. This was AT&T’s first full quarter since the merger of SBC and AT&T and much of the company’s spin on the performance compared the combined company to what had been just SBC during the year-ago quarter.
Much of the financial press reported these apples-to-oranges numbers, but what I present below are “normalized” financial data that include both companies for all time periods. Looked at this way, the numbers aren’t bad, but they’re not as glowing as you may have read elsewhere.
Despite a 6% drop in access lines and a 5% drop in overall revenue, AT&T boosted its net income by 10%, which rose from $1.3 bil. to $1.4 bil. year-over-year. Helping this boost in profitability was the continued strong gains in the lucrative DSL and mobile voice market.
During the quarter, AT&T added 511,000 net new DSL customers, slightly more than the 504,000 net new DSL customers added during the year-ago quarter. AT&T ended the quarter with 7.4 million DSL subscriptions, or around 15% of its total access lines. The company said the 7.4 million figure represented 27.7% of consumer primary lines.
At the same time, AT&T continued to lose local access lines, which dropped to 48.8 million by quarter’s end, a loss of 6% year-over-year.
The company’s mobile voice business, however, is booming, with AT&T’s Cingular arm adding 1.67 million net new mobile voice customers during the quarter. By the end of Q1 06, AT&T served 55.8 million wireless voice customers, up 11% year-over-year.
| AT&T Key Statistics* | 1Q05 | 2Q05 | 3Q05 | 4Q05 | 1Q06 |
| Total access lines (mil.) | 51.9 | 51.0 | 50.2 | 49.4 | 48.8 |
| DSL customers (000) | 5,608 | 5,968 | 6,496 | 6,921 | 7,432 |
| % of total lines | 10.81% | 11.69% | 12.94% | 14.01% | 15.24% |
| Quarterly adds (000) | 504 | 360 | 528 | 425 | 511 |
| Video Customers (000) | 394 | 404 | 419 | 457 | 491 |
| Wireless Voice Customers (000) | 50,350 | 51,442 | 52,292 | 54,144 | 55,810 |
| Total operating revenues (mil.) | $16,670 | $16,602 | $16,468 | $16,279 | $15,835 |
| Net Income (mil.) | $ 1,319 | $ 1,257 | $ 1,729 | $ 1,862 | $ 1,445 |
| *Financial data normalized to include AT&T Inc. and AT&T Corp. | |||||
Posted by Cynthia Brumfield at 7:12 PM | Print | Comments (0)
The Antitrust, Competition Policy and Consumer Rights Subcommittee of the House Judiciary Committee held its hearing on network neutrality this afternoon and the sole opponent to mandatory net neutrality regulations didn’t stand a chance. (I was wrong. The witness list was not evenly divided between pro-and anti net neutrality witnesses.)
In a hearing filled with surprises, Walter McCormick, CEO of US Telecom, the trade association representing the phone industry, was forced again and again to defend his members’ desires to create a “two-tiered” Internet. McCormick was out-talked, out-argued and, in the case of many subcommittee members, out-ranked as he tried to support the idea that phone companies have the right to enter into special deals with selected Internet content and application providers for improved broadband service delivery.
It started with the subcommittee’s chairman, Rep. Chris Cannon (R-UT), who kicked off the hearing by saying that the “open architecture of this medium is central to our fundamental understanding of the Internet.”
Ranking member John Conyers (D-MI) was even more impassioned. “We have telecom companies that have indicated that they do not intend to let companies like Google and Yahoo or next-generation Internet entrepreneurs go free or use the pipes without significant payments.”
The pro-network neutrality witnesses returned repeatedly to the idea that the phone companies’ promises to not “block, degrade or impair” Internet connections are thin smokescreens. Columbia law school professor Tim Wu said that phone companies want to pursue the “Tony Soprano” model of Internet delivery.
With their notions of a “fast-lane” or premium tier of Internet delivery for content and applications providers, the phone companies are in essence saying “pay us or we will ruin your business,” Wu said. “That’s a protection scheme and not a market strategy.”
Paul Misener, Global Public Policy VP at Amazon.com, said the phone companies’ proposed higher priority services equate to the telcos’ saying “pay us for prioritization or your content will be degraded compared to those who are willing to pay.”
All of the panelists agreed that a vigorous broadband infrastructure is critical to the U.S. economy, but that’s about as far as it went. The pro-network neutrality witnesses warned that what the phone companies want to do will damage U.S. competitiveness.
“The real threat is that the anti-competitive side of these networks will spill over into what is one of the best functioning markets in the U.S. today,” Wu said. “I worry that if we allow the incumbents to control access to Google, what happens to the next company, to the next Larry and Sergey in their dorm rooms,” Rep. Zoe Lofgren (D-CA) said.
McCormick tried to raise the point that broadband providers need incentives to invest in the network, and that network neutrality proponents threaten to weaken those incentives with regulations. “Continued advancement rests on continued investment in these networks,” he said. “The answer is investment. Not legislation that would prevent it.”
In response to McCormick’s argument, several of the witnesses agreed that expanded networks require stepped-up investments, but disagreed with McCormick that this equation justifies charging third-party providers more for preferred or superior Internet delivery. As Rep. Lamar Smith (R-TX) said, “the debate here is: Who should pay the costs?”
“We support consumer tiering of services, where a gamer pays more than someone who uses the Internet just for email,” Amazon’s Misener said. “The question to the Committee and the question to the Congress is what is the best way to fund these things,” Wu said. “The worst way is to allow the network owners, as gatekeepers, as crown corporations to distort this part of the American economy.”
McCormick tried a risky Washington gambit and failed miserably. McCormick attempted to equate what the phone companies want to do with what Google, a big network neutrality proponent, already does. McCormick tried to liken the preferred Internet delivery that telcos want to offer with Google’s sale of advertising to the highest bidder on search results pages.
“There is a screen bias in Google,” McCormick said. “The reason is that there is a priority in advertising that discriminates against Trover” [a local DC bookstore] in favor of Amazon.com.
The metaphorical howls were loud and long in response to this analogy. “The search engine market is a highly competitive market in which it’s truly survival of the fittest,” Wu said. “What we’re talking about here is a completely different issue. The analogy is not apt.”
Rep. Lofgren, whose district borders Google’s home town of Mountain View, said “it is a mistake to suggest that anything but the algorithm that they use comes up with the results. They also have paid placements but I think it’s a mistake and misleading to mix those two things together.”
Amazon’s Misener said “there are two dozen search engines out there. If there were two dozen broadband providers out there, we wouldn’t be seeking legislation.”
McCormick was also put on the spot by Rep. Adam Schiff (D-CA), who pressed the telco lobbyist on whether the phone companies would rely on their “dumb pipe” defense if they actively worked with third-parties to create special and improved Internet tiers. Hollywood, home turf for Schiff, wants broadband providers to take a more proactive role in sniffing out content pirates, but the telcos have maintained that’s not their responsibility given that they are merely passive content conduits.
“Aren’t you going to be taking on the responsibility - won’t it be more difficult for you to say we’re just a dumb pipeline?” Schiff asked. McCormick seemed at a loss for a response and then ultimately argued, not convincingly, that the telcos will help to speed the distribution of legitimate content on the Internet by working with the Hollywood studios.
Judiciary is clearly upset about the telecom reform bill moving through the House Commerce Committee (mark-up started at 5 pm today) and several members indicated that they felt the net neutrality provisions in that draft legislation attempt to side-step the antitrust laws, which is within the Committee’s juridisdiction.
Rep. Cannon asked what would happen to antitrust enforcement if the Barton Bill were to pass. “The bill entrusts exclusive authority with the FCC and then limits that authority,” Misener said, suggesting the role of antitrust analysis would be diminished.
McCormick, no doubt battle-weary at the end of a long, intense hearing, said “I’m sure if there is a concern that that language would have any negative impact on antitrust enforcement, that the three of us could agree that that language would drop out and that antirust law would prevail.” This move would probably delight the telcos given that they didn’t want any network neutrality language in the Barton bill to begin with.
Posted by Cynthia Brumfield at 6:08 PM | Print | Comments (0)
(Reston, VA) The mayor of St. Cloud, FL said today at the Digital Cities Expo that the press reports yesterday about problems with the city’s high-profile free Wi-Fi project are distorted. Mayor Glenn Sangiovanni said the city’s ground-breaking municipal broadband service, which launched on March 6, is doing very well, achieving its goal of supporting city functions and providing no-cost broadband to citizens.
“If you talk to two or three people who are not happy, that is the story,” Sangiovanni said. “They don’t talk to the 97% [of users] who are.”
Usage statistics tell a more positive story, he argued. From March 6 through April 19, 36% of the residents registered for the service. Over that same time period, the network registered 50,900 sessions with the average session length of 3.79 hours.
Equally important, the city’s services have experienced tremendous benefits, a key goal of the project. “Just on the public safety side, look at the benefits,” Sangiovanni said.
There are bound to be problems during this “soft opening” time period of the network, he said. But citizens are advised to test out the service before before disconnecting their current broadband connections. Sangiovanni said that citizens are told to “hang onto your provider until you’re comfortable with CyberSpot [the name of the service] and then get rid of your subscription.”
Posted by Cynthia Brumfield at 11:18 AM | Print | Comments (0)(Reston, VA) Vint Cerf, “father” of the Internet and currently Internet Evangelist at Google, kicked off the jam-packed Digital Cities Expo here today with a wide-ranging and, as usual, highly informative keynote speech. Cerf offered first a bird’s eye view of the development of the Internet, noting that there are currently more than a billion users on the Internet and more than 400 million machines running in server mode.
Despite this phenomenal presence, “when there are 6.5 billion people in the world, you realize we have a long way to go,” he said.
Cerf argued against the concept of a two-tiered Internet advocated by some broadband providers, telcos in particular. He recapped the idea that the Internet is built on an end-to-end principle, with one user paying for his access on one end and the other user paying for her access on the other end. Once each endpoint access is paid for, the two users are free to communicate back and forth.
“The reason that’s important is that the network allows people to do pretty much what they want to do. You don’t have to ask permission from the ISP,” Cerf said. “The permission-free way to the Internet has fostered all kinds of innovation.”
Broadband providers, therefore, shouldn’t have the right to alter users’ access to Internet content and applications based on the deals they cut. “They [users] should not be constrained by broadband carriers based on deals they made with someone else,” Cerf said.
He also advocated that broadband should be symmetrical. The notion that individual users might someday own their own servers for transmitting massive amounts of information across the Internet is not a far-fetched one, Cerf said.
Without symmetrical upstream communications, innovation is slowed. “I consider asymmetric broadband platform a stopping point or a plateau beyond which we must go,” he said.
Speaking to an audience composed mostly of local government employees, Cerf stressed that geo-indexing of content can promote a city’s economic development. “When you put a city up online and incorporate into the information that is available things that are geographically indexed, you can develop all kinds of interesting services.”
Understanding where traffic congestion is occuring in real-time, for example, or just compiling information on all the numerous aspects of community life will lead to a “city that knows itself,” Cerf said, which can only improve operations and the city’s attractiveness. “I can’t overemphasize the utility of this geographically indexed information.”
Posted by Cynthia Brumfield at 10:35 AM | Print | Comments (0)
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