Franken, Kerry lead charge to defend FCC's net neutrality rules in the Senate

By Sara Jerome - 02/23/11 02:16 PM ET

Four Senate Democrats wrote to Majority Leader Harry Reid (D-Nev.) and Minority Leader Mitch McConnell (R-Ky.) on Wednesday to oppose GOP efforts to defund net neutrality rules through spending legislation.
The letter included Senate Commerce Communications subcommittee Chairman John Kerry (D-Mass.) and Sens. Al Franken (D-Minn.), Maria Cantwell (D-Wash.) and Ron Wyden (D-Ore.).
"Telephone and cable companies do not own the Internet. But if [the anti-neutrality effort] is successful, they will," the letter said.
The spending bill that passed the House on Saturday included language to prevent the FCC from using funds to implement its controversial net neutrality rules, which it passed in December over strong objections from Republicans.
"We ask you to object to any similar efforts here in the Senate. Such action aims to strip the FCC of its legal authority over modern communications and hand control of the Internet over to the owners of the wires that deliver information and services over them," the letter says.
The four Democrats also oppose use of the Congressional Review Act (CRA) to repeal the regulations, which is another House proposal.
They point to support for the FCC rules from "the original investors in Google and Netflix, the father of the Internet Tim Berners-Lee, a host of companies, venture capitalists, and hundreds of thousands of users of the Internet."
The signatories include the Senate's most ardent net neutrality advocates. Franken and Cantwell have written legislation to make the rules stronger. The aggressive language in the letter reflects that.
"Unfortunately, the House has decided that it knows better what is good for the Internet than the people who use, fund, and work on it," it says. "They claim to stand for freedom.  But the only freedom they are providing for is the freedom of telephone and cable companies to determine the future of the Internet, where you can go on it, what you can attach to it, and which services will win or lose on it."
Analysts say defunding net neutrality through the continuing resolution may be difficult because Senate Democrats and President Obama support the rules.

However, they also say it may have slightly better odds than repeal through the Congressional Review Act (CRA), because net neutrality is a lesser priority compared to top Democratic items such as healthcare. Advocates fear their priority could get lost in the mix.
Sen. Kay Bailey Hutchison (R-Texas), ranking member on the Commerce Committee, Sen. John Ensign (R-Nev.), ranking member of the Communications subcommittee, and McConnell introduced a resolution of disapproval last week to repeal the rules through the CRA.
Reid on Tuesday said that Senate Democrats would not accept any of a number of riders attached to the CR by the House.
"We're not going to resolve the issues of abortion, or net neutrality, or clean air on this CR," Sen. Charles Schumer (D-N.Y.) told reporters.
The House bill cuts $61 billion from 2010 levels, while Reid and Senate Democrats have said they will only accept much smaller cuts from current spending. If differences cannot be resolved, the government could shut down.
- Erik Wasson contributed to this report.


Alas, the Democrats who signed this letter appear to have been listening to inside-the-Beltway lobbyists rather than hearing from the real world outside the Beltway. Hopefully they will reconsider if they understand the actual effects of the FCC's regulations. For an account of what things are really like in America outside the Beltway, see my testimony, delivered before the House Judiciary Committee last week, at http://www.brettglass.com/testimony.pdf seen belowBY BRETT GLASS on 02/23/2011 at 14:42

PREPARED TESTIMONY OF LAURENCE BRETT (“BRETT”) GLASS
OWNER AND FOUNDER, LARIAT
A WIRELESS INTERNET SERVICE PROVIDER SERVING
ALBANY COUNTY, WYOMING
HEARING ON:
“ENSURING COMPETITION ON THE INTERNET;
NET NEUTRALITY AND ANTITRUST”
BEFORE THE COMMITTEE ON THE JUDICIARY,
SUBCOMMITTEE ON INTELLECTUAL PROPERTY,
COMPETITION, AND THE INTERNET
Tuesday, 15 February 2011
2141 Rayburn House Office Building
Chairman Goodlatte, Ranking Member Watt, and Members of the Committee:


Thank you very much for inviting me to testify. It is a great honor for me to be the first
of my relatively young industry to testify before Congress. I hope that there will be
many more opportunities for myself and my colleagues to communicate with our
nation’s decision makers regarding Internet policy.
First, some background. I am an Electrical Engineer. I received my Bachelor of Science
from the Case Institute of Technology in 1981 and my Master’s from Stanford in 1985.
While at Stanford, I worked on fixing bugs in the brand new network called the
Internet, and also on digital radio technology which laid the groundwork for Wi-Fi. I
have designed computer chips, written popular computer software, and penned more
than 2,500 published articles for technology-oriented magazines such as BYTE,
InfoWorld and PC World.
In the early 1990s, I moved from Palo Alto, California to the beautiful, small college
town of Laramie, Wyoming. Laramie is roughly the same size as Staunton, Virginia,
though it is more isolated. When I arrived, I discovered that there was no ready access
to the Internet outside of the University campus. Working with others who also wanted
access, I founded LARIAT, the world’s first fixed wireless Internet service provider, or
WISP. LARIAT began as a nonprofit cooperative whose purpose was to teach,
promote, and facilitate the use of the Internet.
Fast forward 11 years, to 2003. The Internet was well established, and the membership
decided that they no longer wanted to be members of a co-op. They simply wanted to
buy good Internet service from a responsible local provider. So, the Board prevailed
upon me and my wife – who had served as caretakers of the network and had built
most of the equipment with our own hands – to take it private. We did, and we’ve been
running LARIAT as a small, independent ISP ever since. After all these years, our
passion for bringing people fast, affordable Internet service hasn't changed. Nothing can
beat the sense of achievement we feel when we hook up a rural customer who couldn't
get broadband before – or when we connect a customer who has decided to "cut the
cord" to the telephone company or cable company. We have very slim margins; our net
profit is less than $5 per customer per month. But we're not doing this to get rich. We're
doing this because we love to do it and want to help our community. We at LARIAT
have always been the strongest possible advocates of consumer choice, of free speech,
and of inexpensive, high quality access to the Internet. It’s our mission and it’s our
passion. And while I now have more help, I still climb rooftops and towers to install
Internet with my own hands, to train employees, and and to check the quality of every job.
Now, since LARIAT started, the incumbent telephone and cable companies have also
gotten into the broadband business. We compete gamely with them within the city
limits, but our services, unlike theirs, extend far into the countryside. As we grew,
others saw what we’d done or independently came up with the same idea. Some even
set up shop in our town, forcing us to compete harder and innovate more. We estimate
that there are now between 4,000 and 5,000 independent wireless ISPs like ours, as
shown on this map:


WISP NationaL Map




The map, compiled by wireless consultant Brian Webster, understates WISPs’
coverage. It shows the service areas of only about 40% of all WISPs, and it’s about a
year old; our industry has expanded dramatically since that time. WISPs now serve
more than 2 million people and reach approximately 70% of all US homes and
businesses, including many with no access to DSL or cable. We create local high tech
jobs, and we stimulate the development of other businesses in our communities.
Because WISPs don’t use fiber or wires for the “last mile,” we can cost-effectively
serve areas where there is no business case for any other form of terrestrial broadband.

We also provide vigorous competition in areas where other kinds of broadband do
exist. For example, a WISP called DC Access serves many homes and businesses here
on Capitol Hill and provides the free Wi-Fi on the Supreme Court steps, a few blocks
from this chamber. If you stop for refreshment at Ebenezer’s coffeehouse, near Union
Station, you can open your laptop and browse the Web thanks to this same provider.
Unfortunately, I am here to tell you today that the “network neutrality” rules enacted by
the FCC will put WISPs’ efforts to provide competitive broadband, and to deploy it to
rural and urban areas that do not have access or competition, at risk. Firstly, the rules
address prospective harms rather than any actual problem. Contrary to what some
advocates of regulation say, ISPs have never censored legal third party Internet content.
Customers would quickly move to competitors if they dared to try. Secondly, even
before the rules were issued, the Commission’s NPRM created uncertainty, which, in
turn, drove away investors. The final rules are vague, permitting “reasonable network
management” but not fully defining what the word “reasonable” means. As FCC
Commissioner Robert McDowell pointed out in his well written dissent, this lays the
groundwork for protracted, expensive legal wrangling that no small business can afford.
And such factors as the political agendas of the Commissioners who happen to be
sitting at that moment may determine the outcome.

The rules also allow anyone – whether or not he or she has service from the provider in
question – to file a formal complaint alleging violations. Even now – before the rules
have taken effect! – groups here in Washington, DC have filed complaints against
MetroPCS for offering an affordable smartphone service plan which prohibits a few
bandwidth-hogging activities. There are other plans available for those who do not like
those terms, and the minor restrictions are more than worth the fantastic deal users get.
But MetroPCS, one of the shrinking number of competitive mobile wireless providers,
must answer the complaint and may be forced to stop offering service plans that
customers willingly choose and enjoy.
My own company, which is much smaller than Metro PCS, could suffer a similar fate.
Our most popular residential service plan comes with a minor restriction: it does not
allow the operation of servers. Mr. Chairman, most Internet users would not know what
a server was if it bit them, and have no problem uploading content to a Web site such
as YouTube for distribution. Business customers that do need to operate servers can
obtain that capability by paying a bit more to cover the additional cost of expensive
rural bandwidth. But if the rules take effect and the FCC decides against Metro PCS,

we’ll almost certainly be forced to shift everyone to the more expensive plan. We will
therefore be less competitive and offer less value to consumers.
We will also hesitate to roll out innovative network management practices and services,
for fear that the Commission would find fault with some aspect of them. For example,
selling priority delivery of data – even for a new high tech service, such as telepresence
– is strongly disfavored by the rules. This is the equivalent of telling UPS or FedEx that
they cannot offer shippers overnight delivery, because it is somehow unfair to those
who use less expensive ground service.
Such undue micromanagement is not necessary in a competitive market. Even in our
small, remote community, there are 10 facilities-based broadband providers, and many
more non-facilities-based providers who deliver service via DSL lines. The resulting
market discipline is far more effective than static rules could ever be.
There are other problems in the rules, but due to limited time I can only mention one
more. That is that the rules are not evenhanded. There are carve-outs for mobile
carriers, who are claimed to be part of a nascent industry that faces significant
challenges. But ironically, these exemptions were not extended to fixed wireless
providers such as WISPs. Mobile phones’ market penetration is far higher than that of
WISPs, who are still working diligently to achieve similar market share and
recognition. And WISPs’ customers expect higher performance than mobile customers,
even though our service is delivered over noisy, shared unlicensed spectrum. If mobile
wireless providers deserve special consideration, then WISPs certainly do as well.
In any event, in my FCC filings, I urged the Commission to take measures to promote
competition rather than imposing onerous regulations which would require us to ask
permission to innovate. But the majority rejected this approach in favor of onerous
regulations which address a “problem” that does not exist.
I therefore urge Congress – which is the ultimate source of the FCC’s authority – to set
things right. Rather than excessive regulation, which would extinguish small
competitors like WISPs and create a duopoly requiring constant oversight, we should
facilitate competition, crack down on anticompetitive tactics, and then allow markets to
do the rest. Only by adopting this approach can we allow American small businesses to
create jobs, innovate, and prosper while solving a very real problem: providing
ubiquitous broadband access to our nation.