As I reported earlier, Bell Canada has been caught throttling traffic from independent service providers. More data is now coming in and the extent of the bandwidth throttling has been remarkable. Here's a 24hr snapshot from one ISP:

Meanwhile, independent ISPs have set up a map of where they're being discriminated against -- as it turns out, Bell Canada has been doing this to scores and scores of competitors. Here's the map:

View Larger Map

FCC Commissioner McDowell presented at the Tech Policy Summit pointing to the recently announced Comcast/Bittorrent "solution" whereby Comcast would stop degrading Bittorrent traffic as a huge success. Personally, I think the so-called solution does nothing to protect end-users from future malfeasance by network operators, so I asked Commissioner McDowell what the FCC is doing to prevent what will certainly become a data obfuscation arms race from developing. Here's the problem in a few easy-to-understand steps:

1. A network operator discriminates against certain types of traffic.

2. End users begin to encrypt their traffic and pass data from applications and/or services that are discriminated against through an encrypted tunnel (e.g., VPN, SSH, etc.).

3. The network operator is now forced into a fairly problematic decision -- if they don't discriminate against encrypted traffic, more and more services and applications will encrypt their traffic; but if they do discriminate against encrypted traffic, they're saying, in essence, that if you want privacy, you will get worse service.

4. Meanwhile, corporations that rely upon VPN for their everyday dealings, will scream bloody murder; so then network operators are forced into an even more dastardly decision -- discriminate wholesale against classes of users. In other words, all residential-class users will be foisted off into a low-priority tier of service.

So how can this be avoided?

Build capacity.

A great resource discussing the rationality of this solution is David Levinson and Andrew Odlyzko's, "Too expensive to meter: The influence of transaction costs in transportation and communication". But the main issue is that building capacity is the best solution for end users, while the tiering and further commodification of existing bandwidth comes at the literal expense of end users.

Steven Mansour just pinged me about Bell Canada purposefully degrading traffic of independent internet service providers. This is a huge violation of network neutrality and exactly the kind of behavior by telco incumbents that must be made illegal. Michael Geist looks to have broken the story -- I'm sure it'll be coming out to the more mainstream media momentarily.

The New America Foundation released the following media alert commenting on Verizon's so-called "any app, any device" plan:

Media Alert

November 27, 2007

Verizon "Any Device" Plan a Positive Step, But Details and Full Consumer Choice Still Needed

WASHINGTON - New America Foundation's Wireless Future Program offered qualified praise for this morning's announcement that Verizon Wireless will allow its customers to use any device it certifies on its wireless networks.

"Verizon's plan is a positive step, but FCC Chairman Martin and the other commissioners deserve the credit for making consumer choice a condition on the TV band spectrum licenses that will be auctioned early next year," said Michael Calabrese, director of the Wireless Future Program. "This appears to be a move to head off market entry and new wireless competition from Google and other Internet companies that would result if the incumbent carriers were unwilling to meet minimal FCC consumer choice requirements."

"It remains to be seen whether the pricing and other details will in fact give consumers the same choice of devices and applications that they have on wireline Internet connections," said Sascha Meinrath, research director of the Wireless Future Program. "It is not enough to simply claim support for 'any' application and device. Verizon plans to certify equipment themselves; by definition this means that they will not let certain devices on their network. This and other inconsistencies leave me deeply concerned."

"Verizon's announcement is an acknowledgment that the carriers' business models can accommodate more openness, but the extent of this openness is not yet clear. We believe the FCC should still provide regulatory certainty that the FCC's Carterfone consumer choice rules apply equally to wired and wireless services," stated Mr. Calabrese.

For background on the Wireless consumer choice issue, see this New America paper by Columbia Law Professor Tim Wu:

http://www.newamerica.net/publications/policy/wireless_net_neutrality

Additional background is available at www.newamerica.net/wireless_future.

CONTACT:

Michael Calabrese
Sascha D. Meinrath
202-986-2700

Here's a piece of PR masterwork from the folks at Verizon. For those who have been following the Open Platform debate (an initiative to require an open platform for interconnection of any devices/applications on a small piece of the upcoming 700MHz band that's going to be auctioned in January), you know that Verizon has been 100% against the idea. Verizon has been so entirely against the idea that they contacted the Chairman of the FCC asking that he kill it while, at the same time, they sued the FCC to prevent open platform requirements from going through.

Verizon, in a nutshell, hates the idea of an open platform for the interconnection of devices and applications -- to the point that the FCC Chairman called me and Harold Feld into his office to attempt to get the Public Interest Spectrum Coalition to back off on our open platform demands.

So what's this news really about? Basically, Verizon wants to be able to charge customers (at a price and rate still to be set) to access the services and applications they want on the devices they own. Verizon is, attempting to turn the applications you have bought and paid for (or downloaded for free if you're using free open source software) into commodity so that they can charge you a second time to access them via the Verizon network. In essence, Verizon is adding a corporate tax that goes straight into their coffers for the so-called "privilege" to run the services and applications you want, on the devices you've already bought and paid for. On a digital communications network, data is data is data -- the network doesn't care if the packet is voice, video, text, or any other media -- an open platform should require that data is treated the same way as it is on a DSL line. The idea that Verizon would be able to differentiate among services (and charge users a second time to access an "open platform") is ridiculous. Yet without some sort of rule to stop this form of corporate malfeasance, it's unlikely that we'll ever see cellular DSL-esque services from Verizon.

However this plays out, it's quite likely that Verizon will now be going after the C-band in the January 2008 spectrum auction. Between this and the Android announcement by Google, we could see a fairly interesting bidding war between the two.

From money.cnn.com

Verizon Wireless to Introduce 'Any Apps, Any Device' Option for Customers in 2008

New Open Development Initiative Will Accelerate Innovation and Growth

November 27, 2007: 07:30 AM EST

BASKING RIDGE, N.J., Nov. 27 /PRNewswire/ -- Verizon Wireless today announced that it will provide customers the option to use, on its nationwide wireless network, wireless devices, software and applications not offered by the company. Verizon Wireless plans to have this new choice available to customers throughout the country by the end of 2008.

Read more...

Just when we'd hoped that the US administration might finally begin working on a national broadband strategy, it comes out against one of the key components that more successful countries have implemented. Preston Gralla hits the nail on the head -- from www.computerworld.com/blogs/node/6153:

U.S. Justice Dept. should stay out of net neutrality debate
By Preston Gralla on Fri, 09/07/2007 - 2:04pm

It's clear that the U.S. Department of Justice is far more interested in politics than it is in enforcing the law. What else to make of its recent bizarre criticism of network neutrality proposals?

In a press release, the department said that it had cautioned the FCC against any network neutrality proposals because, the proposals could "deter broadband Internet providers from upgrading and expanding their networks to reach more Americans."

First off, that's flatly wrong. The U.S. has among the worst broadband penetration rates and speeds in the developed world, because the government refuses to take actions to ensure we have adequate broadband coverage.

Secondly, net neutrality would increase competition, not harm it, and there would be better broadband services overall.

That's not the real point, though. The point is that the Department of Justice is supposed to enforce laws, not push specific political positions. Under Attorny General Alberto Gonzales, the department was all about politics, not law enforcement. But he's resigned, and so many people assumed the department would go back to its roots of enforcing laws.

It's clear, though, that the problem is deeper than Gonzales, as this latest statement proves. Whether you are for or against network neutrality, you should hope that our Department of Justice would stay away from politics. For the moment, though, it's as knee-deep in partisanship as ever.

Glenn Fleishman has an excellent analysis of the recent 700MHz auction rules for "open platforms". For those of us who've been fighting for opening up access to the public airwaves, these rules offer a teeny-tiny baby step in the right direction. Unfortunately, there are loopholes large enough to drive the Titanic through, and even this incredibly modest proposal only covers a tiny section of one of the block of what is going to be auctioned. Meanwhile, as the analog TV frequencies are switched to their digital TV frequencies, we have (quite literally) a once-in-a-lifetime opportunity to open up the public airwaves that is being squandered at the altar of quick money (e.g., license auctions) while ignoring solutions that may maximize public utility.

Here's a great clip from my good friend Ben Scott, Policy Director of Free Press:

Ben explains in 5 minutes why the AT&T/iPhone exclusive contract is bad for consumers, innovation, and the general public.

The New Network Neutrality includes ten criteria laid out by Sascha Meinrath and Victor Pickard that help create a more participatory and democratic Internet:

• Requires Common Carriage.
• Is Open Architecture and Supports Open Source Driver Development.
• Is Open Protocol and Open Standard.
• Supports and End-to-End Architectures (i.e., is composed of a "dumb" network).
• Is Private (e.g., no back doors, deep packet inspection, etc.).
• Is Application-Neutral.
• Is Generally Low-Latency and First-In/First-Out (i.e., requires adequate capacity for both).
• Is Interoperable.
• Is Business Model Neutral.
• Is Run by its Users (i.e., is internationally representative and non-Amerocentric).

Download the full paper here.

Viviane Reding, Member of the European Commission responsible for Information Society and Media, gave a talk this past Summer, The Review 2006 of EU Telecom rules: Strengthening Competition and Completing the Internal Market.

James Enck wrote of Viviane's talk, "Little did I know at that time that Viviane Reding was about to drop the structural separation bomb" yet pointed to the seeming disconnect between current EU practices and support for the US telecom model:

I am puzzled, however, by the extent to which she seems to be enamored of the AT&T breakup (failing to mention that it has all but recoagulated over the past year) and the dual-infrastructure (DSL/cable) nature of facilities-based competition in the US. In my experience, none of the brighter minds in industry in the US are anywhere near as sanguine about the situation on the ground there, and many would argue that the entire access formula needs to be rethought from scratch.

Jim Kayne pointed to some extremely interesting highlights from the speech:

• First, at 45 billion Euro in 2005, European investment in the sector has overtaken investment in the US and the Asia Pacific Region.
• Second, a pan-European telecom industry is emerging. The search for economies of scale and the implementation of pan-European strategies, cross-border investment has driven merger and acquisition activity to above 70 billion Euros in 2005, the highest level since 2000. Incumbents today are receiving between 5 and 27% of their income from European business outside their home country. Some are becoming challengers in other EU markets even while remaining incumbents at home. This development is changing the market position, business orientation and also policy view of many operators.
• Third, good implementation of the EU regulatory framework is paying off. EU countries that have applied the EU rules in a timely and efficient manner, following the principle of competition, have clearly achieved the best results in terms of investment in new networks and take-up of new innovative services. The regulatory reform index of the OECD shows that those countries with a poor record of regulatory reform have less investment. While investment in the electronic communications sector is rather high in the UK (0.42% of GDP), Denmark (0.72 % of GDP) and the Netherlands (0.79% of GDP) -- in all these countries we observe, in principle, a very effective application of EU rules -- investment made in the German market reaches only 0.27%. The correlation between investment and competition in infrastructure in the EU is particularly visible in the broadband markets. Countries with strong competition between incumbents and cable operators tend to have the highest broadband penetration. Thus, broadband penetration levels in Denmark, Finland, Sweden and the Netherlands are all above 20% and have already left behind the broadband penetration level in the US.

  Europe's lesson from the liberalisation of the telecom markets is therefore: Competition has been a key driver for investment and innovation. This is a very important lesson also for other network-based markets, inparticular for the energy markets.

In Viviane's talk, she points out that "It is our aim to create a Single European Information Space in the field of electronic communications and media services by 2010. The main objective of the Commission’s strategy is to strengthen the forces of competition in the internal market, notably by modernising EU rules where needed." which would have similar purview as the US FCC, but is also empowered with governmental funding and a history of forcing common carriage and competition among incumbents and newcomers. She goes on to state:

In the Review 2006, I want to tackle three issues:
• First, spectrum – historically a rare public good – has become economically strategic in the wireless society. We urgently need to look at how we can use it more efficiently in the EU.
  • to strengthen the application of the principles of technological neutrality and service neutrality to spectrum allocation, where possible;
  • to introduce spectrum trading across the EU in selected bands agreed at EU level; and
  • to improve the coherence and consistency of authorisations for applications with a pan-European or a significant internal market dimension. Those who develop wireless services with a wider reach than a single country should be able to obtain a market entry authorisation as easily as those who offer services only in one Member State.
• Second, what concrete steps can we take towards better regulation? Liberalisation of markets has led to many remarkable successes in this sector. Now we have the chance to regulate less in some markets where competition is already effective, and regulate in a more focussed and more consistent way in markets where competition still has not yet developed.
  • The most effective way to achieve a real level playing field for telecom operators across the EU would of course be to create an independent European telecom regulator that would work together with national regulators in a system, similar to the European System of Central Banks. In such a system, national regulators would continue to act as direct contact points with operators and could directly analyse the market. At the same time, a light European agency, independent from the Commission and from national governments, could ensure by guidelines and, if necessary, instructions that EU rules are applied consistently in all Member States. I have personally insisted that the idea of creating a European telecom regulator is also included as a policy option in the impact assessment of the Commission Communication that I will present this week to allow a broad debate on all these issues.<
• Third, how can we best achieve competition and investment in Europe’s internal market? This will lead me to say a few words on the present debate on “regulatory holidays” and on structural separation in some EU Member States.
  • I understand of course that some incumbent operators are under a lot of pressure because of economic challenges and technological developments such as Voice over IP. However, I firmly believe that the response to these challenges must be new and more successful business models, and certainly not protection, by regulators, from competition. I simply do not buy the argument that investment will only happen if we stop regulating monopolies. In particular in network-based economies, effective competition does not prevent, but drives investment. The EU rules do not permit “regulatory holidays” precisely to prevent the re-monopolisation of markets. Any move in that direction would be a step backwards. It would open the door to higher prices and less choice for consumers. It is my firm belief that “regulatory holidays” are not a policy option for the Review 2006, where we want to pave the way for completing the successful process of market liberalisation. We cannot go into the future in reverse gear.
  • I believe that the policy option of structural separation could answer many competition problems that Europe’s telecom markets are still facing today. Perhaps we have to be as radical as regulators were in the US in the 1980s to make real progress? Of course, we will have to find our own European solutions, adapted to the needs of our continent. But “a European way of structural separation” is certainly a policy option that needs to be discussed intensively in the forthcoming months. This option is therefore also raised in the economic Impact Assessment attached to the Communication the Commission will adopt this week.

More info here, here, and here.