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Internet Pioneers Decry Title II Rules

Carol Wilson

A group of self-proclaimed Internet "elders," including early pioneers of voice-over-IP services and proponents of Internet freedoms, is now warning that the FCC's move to impose Title II regulations on the Internet will have toxic effects on investment and innovation.

The warnings were issued on a conference call arranged by Daniel Berninger, known primarily for his early work in VoIP, including as part of VocalTec Communications, and that also included Jeff Pulver, VoIP pioneer with Free World Dialup and later Pulver.com ; John Perry Barlow, who founded the Electronic Frontier Foundation and is still on its board; George Gilder, economist and author of Telecosm; and Bryan Martin, chairman of 8x8 Inc. (Nasdaq: EGHT), a VoIP provider.

One over-arching goal of the teleconference was to lay to rest the notion that the technology industry universally backs what the Federal Communications Commission (FCC) has done, Berninger noted. While there is general support for net neutrality, imposing Title II regulations is not the answer, he said.

"The US represents 70% to 80% of the [global] information technology economy -- why would you reverse your strategy that got us to this point?" Berninger said.

Gilder was probably the most agitated of the group in decrying the FCC move. He recalled the telecom crash of 2000, and said another crash could result from the new rules.

"We've had 15 years of marvelous success, just stunning success on the Internet [since then]," Gilder said. "Our seven top technology companies are all related to the Internet. The US has four times the investment in fixed broadband than Europe, with its government intervention, and twice the investment in wireless. Most of Internet traffic in the world flows through the US. What on earth is wrong that the FCC thinks it has to reduce it to a public utility?"

Both Martin and Pulver related their experiences trying to be VoIP innovators in a Title II regime, when their efforts drew negative attention from regulators in the days before the FCC under Michael Powell adopted Internet freedom rules.

Martin said 8X8 was barely off the ground when it received threatening letters from the California state attorney general warning the company it needed to register as a competitive local exchange carrier in order to offer voice over the Internet. Calling Title II regulations "the nuclear option," Martin said he expects the new rules to be overturned in court, but only after the industry has suffered a couple of years of regulatory uncertainty and spent a fortune on lawyers. Instead of an FCC ruling, the industry needs action by Congress.

"I am very concerned that in the era of the Title II Internet, we will see many fewer communication innovators come forward because of regulatory uncertainty," added Pulver. Innovators are less likely to act if they think they have to get permission from the FCC, he said.

Barlow called the FCC's actions "singular arrogance" in that a US agency is trying to regulate a global force. Stressing that he speaks for himself and not the EFF, he said the issue in the US is the monopoly/duopoly of Internet access, and that is a problem the FCC cannot solve.

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The group, in general, was a bit derisive in discussing Silicon Valley's support for the new rules. Gilder and Barlow said many of the companies there are afraid of the FCC and not willing to speak up and take on the government directly.

"There is limited willingness to believe that Title II is the best answer to this problem," Barlow said.

Martin believes that those who haven't previously lived through the government regulation that Title II will bring don't understand what it might mean for them.

"There's been a bubble over Silicon Valley protecting them from the FCC and it's been called the information services category," Berninger said. They have been able to ignore the FCC to this point but that will change now.

— Carol Wilson, Editor-at-Large, Light Reading

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3/3/2015 | 4:52:33 PM
Re: Title II is a Gigabit Killer
I think we can skip the whole we need more competition.  That is not a regulation issue.  It is a "There is nobody who is going to lay a whole new network issue."  Competition means that another set of wires is built to overlay the US.  

So, now we can talk about structural separation.


3/3/2015 | 3:49:57 PM
Re: Title II is a Gigabit Killer
The debate will continue for years of course, and the courts and regulator's office will be busy trying to sort through all the arguments. I suspect even though the "internet pioneers" have good arguments, it's going to be hard to stop the train quickly for those in agreement.
3/3/2015 | 1:32:12 PM
Re: Title II is a Gigabit Killer
Absolutely. I would much prefer more competition, and I think net neutrality rules are a sad substitute. We definitely agree there.
3/3/2015 | 12:28:09 PM
Re: Title II is a Gigabit Killer
I think we can all agree that Net Neutralty is a good thing in that blocking content or discrimination is bad. 

Unfortunately, what the FCC has done will do nothing to promote competition. One think that KBode and I agree on is that competition is what would drive faster Internet access at more reasonable spaces and even - dare I say it - decent customer service. 

But that is not part of the NN debate, sadly. 
3/3/2015 | 11:57:01 AM
Re: Title II is a Gigabit Killer
While I disagree with the decision to go all the way to Title II, I think net neutrality is a good thing. We are behind Estonia and Republic of Moldova in average broadband speeds! We INVENTED the internet, we should be at the top of the list for price/speed, but we are currently at 26, according to Netindex.

John Oliver et al never said "Go title II on their asses"; all they said was keep the internet neutral, and I would say they were informed. The broadband companies wanted to make more money, but in the process they were going to set up barriers to startups that wouldn't be able to afford to compete on the "high speed" tier.

The broadband companies have been screwing over american consumers and taxpayers for years. They have taken money and promised to install service and never done it - do we see that money refunded back? No. They have a slush fund collection that they've never used to provide real rural broadband.

The way things were going, there would be no competition for broadband services, because the incumbent players have been changing laws in their favor. Ma Bell was broken up because of monopoly. The we deregulated, and guess what? We are back down to 3 or 4 players, who have the markets sewn up.

If they had been playing fair, and not having the worst customer service on the planet, perhaps consumers wouldn't have gotten pissed enough to make this happen. 
3/3/2015 | 11:52:43 AM
Re: Title II is a Gigabit Killer
"Ironically, I am by nature, on almost every other issue, part of the crowd crying for more regulation. So I'm surrounded by folks who love Net Neutrality. But when I ask them what "freeing the Internet" means, they don't really have a clue."

Yes, people who don't know what they're talking about is bad. I'd argue the lion's share of people on both sides of the issue have no idea what they're talking about. I think the "regulations are always bad -- full stop" folks are just as bad as the "save the Internet (even though I don't know what we're saving it from) folks. 

We obviously need to see the final rules, but everything I see so far is that these are going to be fairly modest regs that give HUGE leeway to all manner of business operations, only being used when an incumbent gatekeeper steps out of line. I think the hand wringing from Pulver and friends is totally detached from what's actually happening.

"As for revisiting this in a year, I don't think that is enough time. It will still be tied up in the courts. We won't know how this plays out for a few years yet."

We agree there, but my point would be the same. If these rules really are as horrible as the anti-regulation crowd believes they are, it should be pretty apparent in short order. If things stay the same (or improve) I assume they'll be quick to admit error? 

Anyway not trying to "twist your words," I've just spent the last two weeks listening to a lot of hyperbole about how evil "Obamacare for the Internet is." :)
3/3/2015 | 11:29:01 AM
Re: Title II is a Gigabit Killer
Okay, now I feel like you are twisting my words. I'm not saying everyone who believes in Title II is uninformed. You were the one who brought up the four million folks backing NN as a reason for its passage, not me. I'm talking about all the people who filled out form letters and sent them to the FCC because John Oliver or someone else told them to. 

Ironically, I am by nature, on almost every other issue, part of the crowd crying for more regulation. So I'm surrounded by folks who love Net Neutrality. But when I ask them what "freeing the Internet" means, they don't really have a clue.

Does Tim Wu -sure, and so does Tim Berners-Lee, another fan of the current decision. As for Google, I'm not sure they are as enthusiastic in their support as you might think. 

And killing off the Internet as a business tool is bad for everyone. The boom in video traffic is what drives folks to buy higher tier services and pay more for them. Do I think that Verizon, Comcast, et al, want to charge Netflix users more to get more bandwidth, lower latency, etc., Sure they do, they are greedy US businesses, just like Coca-Cola, GE, and Wal-Mart. 

As for revisiting this in a year, I don't think that is enough time. It will still be tied up in the courts. We won't know how this plays out for a few years yet. 
3/3/2015 | 11:19:26 AM
Re: Title II is a Gigabit Killer
"But following the uniknformed masses doesn't make for good regulation."

Is Tim Wu uninformed? Is Google? Sprint? Netflix? Barbara van schewick? Dane Jasper? Public Knowledge? Tom Wheeler? Tucows? I think dismissing what happened as the uninfromed wanderings of lemmings out of touch with the issues isn't very fair -- or accurate.

"That's why I simply don't believe broadband ISPs were about to do anything to kill Internet growth - because it would be bad for their business."

On the contrary, double dipping on content providers is VERY good for business. So are heavy-handed usage caps, or things like AT&T Sponsored Data, which lets companies pay AT&T to get a leg up in the race against other app developers so that THEIR app is cap-exempt. Abusing your monopoly over the last mile is GREAT for business -- provided you're just clever enough to keep the PR blowback to a minimum.

"Wheeler himself wanted to go in that direction before Obama and the Oliver masses pushed him toward this solution."

Actually everybody was set on net neutrality rules in 2010, and Verizon sued to overturn them, resulting in the courts telling the FCC they needed to reclassify ISPs as common carriers if they wanted to impose net neutrality provisions able to withstand a lawsuit. After fielding input, Wheeler realized his "hybrid" approach would be on similarly legally unsound footing. Though it's worth remembering, if Verizon hadn't sued to overturn the 2010 rules (rules AT&T and Comcast actually liked), we wouldn't be in this particular situation. Blaming that all on John Oliver and friends just isn't accurate.

"And - this is probably the crux of our disagreement - imposing Title II rules doesn't strike me as "modest" regulation."

Perhaps we can revisit this in a year and make a tally of how much things have changed for companies trying to innovate. If the "regulation is always horrible" crowd is right, things should be in a pretty sorry state.


3/3/2015 | 10:40:17 AM
Re: Title II is a Gigabit Killer
With all due respect to John Oliver, most of the four million folks who "demanded" Net Neutrality don't really understand these issues. I give a lot of credit to the folks who were able to stir up that volume of effort. But following the uniknformed masses doesn't make for good regulation. That's why we try to put folks with some expertise on the regulatory bodies, versus electing them via popular vote.

And you can't deny that many of those same people inflaming the masses today were insistent back in the early 2000s that Netflix and Skype were at risk without rock-solid Net Neutrality provisions. Nothing happened on the regulatory front and those businesses thrived. 

That's why I simply don't believe broadband ISPs were about to do anything to kill Internet growth - because it would be bad for their business. 

And - this is probably the crux of our disagreement - imposing Title II rules doesn't strike me as "modest" regulation. There are other things that could have happened - granted they require Congressional action and that's damn near impossible these days - that wouldn't have been this drastic. Wheeler himself wanted to go in that direction before Obama and the Oliver masses pushed him toward this solution. 

As for knee jerk response, that's exactly how I characterize the "free the Internet" chant from those who don't know what they mean by that. My "knee jerk" response is about 15 years in the making. 
3/3/2015 | 10:29:23 AM
Re: Title II is a Gigabit Killer
"In the 15 years that the FCC has been paying lip service, as you say, look at the dramatic innovation on the Internet side - businesses like Skype and Netflix have blossomed, as have a ton of things that weren't even in the pipeline back then. How we shop, how we book travel and compare prices, even how we arrange transporation - everything has changed."

A reminder though: net neutrality rules are about ensuring things STAY that way -- not about layering those companies with onerous obligations. The FCC (pushed by unprecedented consumer input) isn't aiming for any other objective other than ensuring AT&T, Verizon and Comcast can't discriminate. 

"Whether or not Wheeler would impose new rules isn't the issue - the guy or gal after him might have a different mindset and there's nothing stopping that person from going to rate regulation or unbundling rules."

Absolutely everything over the last fifteen years has veered toward deregulation. Every single step of the way we've deregulated the telecom market. Now, with what appears to be just a modest implementation of regulations that numerous ISPs claim does no harm and consumers demanded, people are claiming we're on the cusp of apocalypse? I think it's over-dramatic and not in line with what's actually happening.

As for Pulver's concerns being brushed aside, similarly we can't brush aside the four million comments to the FCC, most of which clearly supported this push. 

I don't know, I find most of the opposition to this push to be knee jerk and purely based on a hatred of government, when there really is such a thing as balaned regulation driven by consumer interest.
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