Moving from Net neutrality to infrastructure common carriage.

BY DAVID ROSEN

Lance Weiler recently provided in these pages a valuable overview of Internet video-distribution options for independent filmmakers. Indies who are considering the Internet as a distribution medium for their works should study his informative discussion. [“Navigating the Digital Divide,” Winter 2008]

There are, however, other issues that indies, as creative filmmakers and as citizens, should bear in mind about the changing nature of the Internet. The future of the Internet, as with most aspects of our lives, is being determined behind our backs. Awareness of the forces and issues driving these changes can help indie makers think through their relative position within the long-term development of the Internet. This orientation will enable us to better navigate possible distribution options and strengthen our understanding of the forces currently remaking the Internet as well as much else that defines our technologically determined society.

Internet Video Distribution

The increased adoption of broadband Internet carriage is critical to short- or long-term distribution opportunities available to indie filmmakers. The Federal Communications Commission (FCC) champions the fact that during the first six years of the Bush administration, between December 2000 and December 2006, the total number of broadband lines in the U.S. increased twelvefold — from almost 6.8 million lines to 82.5 million lines. The Pew Internet and American Life Project estimates that 47 percent of American households have broadband today. The market research firm Insight Research projects that broadband subscription will reach 88 million American homes (75%) by 2011.

The FCC uses a very expansive definition of broadband. It sets the data transmission speed very low, at above 200 kilobits per second (kbps) (i.e., 200,000 bits per second) in at least one direction. This is usually set at the speed the signal moves downstream (from the Internet to the user‘s computer) as distinguished from upstream (from the user‘s computer to the Internet). Unfortunately the Organization for Economic Cooperation and Development (OECD) ranks the U.S. 15th out of 30 postindustrial nations in per capita broadband use.

Why is the U.S. so low on the global network totem pole? SpeedMatters.org estimates that average downstream broadband availability in the U.S. is but 1.9 mbps — in Japan it is 61 mbps and in Hong Kong 1 gbps is being offered. America is playing catch-up in the broadband wars. If Net neutrality is not strengthened — if infrastructure common carriage does not become the true “gold standard” of national networking technology — the U.S. will only further slip in high-quality communications and, thus, further intensify the economic free fall we now confront.

Some Technical Background

At the heart of the Internet‘s vitality is the electronic network, the infrastructure upon which the Internet (or Internet Protocol) and the specific application runs. This is what enables seamless downloading of a movie (Hollywood or USG, “user generated content”), instantaneous access to a Web site or worldwide participation in a multiplayer game. Like the operating system that functionally underlies one‘s computer, whether PC or Mac, the IP defines an application‘s performance. However under this level, at the level of infrastructure, like the computer‘s motherboard, the Internet‘s underlying architecture determines its ultimate capabilities. The infrastructure sets the limit to what‘s possible.

Video is increasingly becoming the dominant media format on the Internet. A recently-released study by the Nemertes Research, a Boston-based firm, entitled “The Internet Singularity, Delayed: Why Limits in Internet Capacity Will Stifle Innovation on the Web” was so alarming that it garnered front-page coverage in the New York Times and other media outlets. It warns that the Internet is on the verge of being overwhelmed due to increased video carriage. It raises the fear that “Internet access infrastructure, specifically in North America, will cease to be adequate for supporting demand within the next three to five years.”

The study found that increased bandwidth is being eaten up by greater worldwide usage of streaming and interactive video, file sharing, peer-to-peer file transfers and music downloads. Based on comScore research, Nemertes claims that “nearly 75 percent of U.S. Internet users watched an average of 158 minutes of online video in May [2007] and viewed more than 8.3 billion video streams.” The study argues that network providers, the telcos and cable operators, will have to invest an additional $42 billion to $55 billion (or 60 to 70 percent above the planned $72 billion) to meet anticipated increased capacity demand.

But in keeping with Mark Twain‘s adage, rumors about the end of Internet capacity are premature. Like the repeated claims that the world is running out of oil, the claims of Internet dwindling capacity provide a rationale for the suspension or elimination of government regulation of network carriage.

Estimates vary widely as to how much “dark” fiber, or unlit capacity, is in place in the U.S. The FCC places dark capacity at 40 percent; other experts estimate it as high as 70 percent. According to TeleGeography Research, “Most of the potential capacity in fiber networks remains untapped.” Nevertheless, playing on a fear of limited capacity permits the major Internet providers — the telcos and cable operators — to argue for the need to increase their control over content on the Web and to create a second, private and more powerful Internet.

Internet video vs. IPTV

We are in the midst of the restructuring of video delivery over the Internet. Up to now, video was carried over what is known as the public Internet, an interconnected global network with open and equal access for everyone whether it‘s an online Web site somewhere in the world, an indie filmmaker working in her loft or the world‘s largest media conglomerate. However with the introduction of what is known as Internet Protocol Television (IPTV), a misnomer if there ever was, a second, privately controlled and managed network is being established by the telcos to transmit video and other services. According to Marty Richter, an AT&T spokesman, “best-effort Internet video can be subject to delays due to lower bandwidth, high traffic or poor connection quality.” Reassuringly, he adds, “carrying video over a proprietary network allows protection of content and control of video quality without worrying about the privacy and quality issues inherent to the public Internet.”

In essence, the telcos, notably AT&T and Verizon, conceive IPTV as a competitive challenge to cable‘s digital broadcasting. It is designed to deliver high-quality video to a customer‘s TV set (or computer monitor). Like a cable network, it‘s a closed system. And the telcos are staking much of their futures on IPTV.

In addition to programming, IPTV offers a host of cable-like services including multiple picture-in-picture applications, TiVo-like digital video recording (DVR) functions, an interactive program guide, pay-per-view and video-on-demand. IPTV is offered as part of what the telcos call a “triple play” (or “quad play”): a digital package of video, data and voice (and mobile) services.

The telcos are pursuing different IPTV deployment strategies. AT&T‘s video service is called U-verse and is part of what it calls “Project Lightspeed” and Verizon‘s effort is dubbed FiOS. However their deployment efforts share one thing in common: They are intended to “cherry-pick” wealthy neighborhoods while making no commitment to provide similar service to other areas.

AT&T launched its U-verse service in 2006. It is planned to be a 40,000-mile fiber rollout and to be deployed in partnership with (whom else?) Microsoft. It claims that it will spend $4.6 billion through 2008 for fiber deployment to reach upward of 19 million homes. However it is running into troubles and has slowed down on its market penetration projections. In September 2007, it claimed to have reached 100,000 users offering 6 mbps service. It has rolled out to pockets within 25 markets, including sections of Los Angeles (including Anaheim, Burbank, Fullerton, Garden Grove, Glendale and Orange County) as well as Atlanta, St. Louis, Kansas City and Palm Beach and Broward counties in Florida.

As one can expect, service options are available on a pay-to-play basis, very much resembling cable offerings. U-verse programming packages range from a modest “family” subscription for 50 channels all the way to super-duper “U-400” offering 320 channels, including HBO and a sports package, but HD services are extra. These programming packages range in price from $44 to $99 per month and extras cost more.

While AT&T is hedging its investment bets, Verizon is pushing an aggressive approach. AT&T is stringing its fiber only into the neighborhood or to the curb (or pedestal) near the home. However Verizon, adopting a deployment model known as fiber-to-the-home: its high-performance fiber actually runs to the customer‘s home.

Verizon claims to be spending $23 billion to upgrade its network to fiber and insists it will have 18 million homes wired by 2010. Its service, FiOS, offers “triple play” options. Its network is running on a 4.5 gbps fiber downstream network of which 3.5 gbps is dedicated to FiOS TV; it offers 2 mbps upstream.

Verizon reported that at the end of September 2007, it had more than 700,000 FiOS customers in 12 states. However while the service was available to 4.7 million premises, only about 15 percent subscribed. According to the cable industry publication Multichannel News, in 55 communities where Verizon launched FiOS, the average median household income was $81,920, nearly twice the national median household income.

Its program offerings duplicate conventional cable selections, ranging from the usual suspects of entertainment, sports, information, women‘s, music, movie programming and the rest. Remarkably PBS (let alone independent programming services like Link-TV or Free Speech TV) is not included; however, “FiOS TV Local provides access to local TV channels, community and educational programming for $12.99/month.” Its basic English-language package, “FiOS Premier,” runs $42.99 a month for 200 channels (including the leading broadcast and cable networks) and a host of music and radio channels; extra services cost extra dollars.

Tightening the Internet Screws

As IPTV is rolled out, the telcos and cable operators are taking a more aggressive role in their attempts to garner greater control over the Internet and communications in general. This influence is partially market-driven, like the pressure to consolidate the number of Internet Service Providers (ISPs); it needlessly involves outright censorship, particularly blockage of content they apparently do not approve of; and even involves the flat-footed imposition of corporate power, like the attempt to rig an FCC hearing. A lot is at stake in the battle over the future of the Internet and networked communications. The big dogs are not pulling their punches in their attempt to ensure a favorable outcome.

The future of technologically mediated communications is anchored in the evolution of the Internet. One sign of the increased corporate control over the Internet is the steadily increasing monopolistic aggregation of Internet Service Providers (ISPs). Not unlike the fate of small providers in other sectors of the culture, such as information and entertainment industries, the large and diversified collection of small companies that provide Internet access is shrinking. According to the Census Bureau, between 2000 and 2005, the number of ISPs shrank by almost 75 percent from 9,335 to 2,437. Equally significant, as of 2007, the top five ISPs controlled 57 percent of all Internet access; the top 23 ISPs controlled approximately 75 percent of all access. The top five ISPs and their relative market share are: AT&T (18.2%); Time-Warner (18%; American Online, 10.2% and Road Runner, 7.8%); Comcast (13.1%); and Verizon (8.1%). [ISP-Planet, December 13, 2007]

ISP consolidation is but one expression of the intensifying conglomerate control over the Internet. Censorship is another. Some may remember the mysterious glitch last year in AT&T‘s distribution of a live Pearl Jam concert Webcast in which the band‘s lead singer, Eddie Vedder, criticized President Bush. Since then, other episodes of unexpected glitches have come to light, these involving the Flaming Lips and the John Butler Trio. In January AT&T suppressed an interview with Joel Johnson, a writer for the tech site boingboing.com, from its online tech show, Hugh Thompson Show; he was critically reporting on AT&T‘s plans to filter and inspect all Web traffic for perceived copyright infringements. [MSNBC, January 25, 2008]

But censorship is not limited to AT&T. Verizon was caught blocking text messages sent by NARAL Pro-Choice America to its own members. And Comcast was caught in what is known as “seat-gate” — in which it hired people to occupy seats at an FCC hearing in Boston, attempting to keep out not only members of the public, but media advocates, academics and independent competitive Internet providers. This may sound pretty comical, but last year, as the New York Times and others revealed, both Verizon and AT&T gave private customer phone (including Internet) records to the National Security Agency. Whether their complicity is “legal” is being resolved in the fierce battle now taking place in the U.S. courts and Congress. The battle pits the Bush administration and the Senate against Congressional progressive Democrats and some libertarian Republicans. The phone companies, who first denied participation, must be spending untold millions for lobbyists, publicists and who-knows-who-else in their effort to secure immunity from these lawsuits.

The battle for the future of the Internet is also being fought out over technical issues. For example Vuze is a Silicon Valley-based company that provides high-definition (HD) content over the Internet. It uses a technique known as BitTorrent file-sharing. In a complaint to the FCC, Vuze claims that Comcast has restricted Internet band-rate, the speed of signal transmission, thus undercutting its ability to deliver HD video to customers. Vuze‘s CEO Gilles BianRosa complained: “What we have is a horse race, and in this case they own the only horse track in town.” Marvin Ammori, general counsel of the public interest group Free Press, backed up BianRosa, telling the FCC that Comcast‘s decision to slow BitTorrent users is discrimination. “Blocking or delaying BitTorrent is a clear violation of the right to access the content and applications of their choice,” he said.

One final example illustrates the diversity of issues over which the future of the Internet is being fought out. The telcos are pushing to impose different carrying fees for application providers. For example AT&T has argued that it needs to charge a premium rate to, for example, Google to deliver high-quality video and other advanced services. This effort goes against one of the basic tenets of the Internet culture: All applications, be they for video, music, data or voice, as digital “1s” and “0s,” are equal on the Net.

From Net Neutrality to Infrastructure Common Carriage

Over the last few years, media activists and others have effectively rallied to defend Net neutrality. In broadest terms, Net neutrality involves the absence of restrictions on Internet transport of content carried over a network. In essence, it is the call for a level playing field by signal carriers and ISPs, be they telco or cable operator. Such neutrality ensures that all signals or “packets” carried are distributed on a first-come, first-served basis no matter from which applications provider they come from or to which destination they are intended.

Since the passage of the Communications Act of 1996, the cable operators and telcos have mounted a campaign to restrict or eliminate transport neutrality. They argue that the increased dominance of huge content providers like Google and YouTube and the explosive growth of video, spam and “illegal” file sharing require more rigorous management of data transport, thus limitations on neutrality. However, in the face of massive public opposition and bipartisan Congressional suspicion, the telcos have been blocked in these efforts. Most importantly, Representatives Ed Markey (D-Mass.) and Chip Pickering (R-Miss.) introduced in February the “Internet Freedom Preservation Act 2008” (HR 5353) to safeguard Net neutrality.

While this legislation, if passed, would help protect Net neutrality, it will likely not go far enough to protect content providers and the American public in the face of the telcos push to establish a second, private Internet, IPTV. The legislation would provide for neutrality at both the application level and the IP or system level. But it would not secure the safety or neutrality at the infrastructure level at which the fiber pipes and routers operate. Only such protections would ensure that the electronic signal — the data packets — would be free from carrier interference or censorship. It is time to move the debate from Net neutrality to infrastructure common carriage.

U.S. telecommuications regulation is rooted in the 1934 Communications Act which extended U.S. Constitutional authority to telecommunication by recognizing telephone companies as “common carriers.” Under the Constitution (Article I, Section 8, Clause 3, the commerce clause), a common carrier must provide service to the public without discrimination for the “public convenience and necessity.” Historically this provision was applied to railroads, bus lines, trucking companies, airlines and other public conveniences. Unfortunately, in the era before digital data and the Internet, telephone common carrier requirements was applying only to voice messages and not to data, text or video transmission. The question that is now coming to define the debate about the future of the Internet is whether traditional common carriage protections should be extended to allegedly private networks operated by telcos and cable companies and cover the full range of digital data. Distinct services of the past, like local service, long distance service, Internet connectivity and broadband content, are being superseded in a common protocol.

“Net neutrality is a distraction,” argues Bruce Kushnick, of Teletruth, a broadband customer advocacy group. “As long as the telco and cable companies control the infrastructure and are allowed to vertically integrate all products (i.e., offer local and long distance, connection to the Internet, broadband and even wireless), they can control any activity or any competition over the networks, including all video. The only next step is to have common carriage returned: While the underlying infrastructure may be controlled by the incumbent, all applications and services should be allowed by all parties.”

Common carriage provides for a neutral telecommunications platform, whether it is for voice or video, data or music as well as if the signals are sent over a wire- or fiber-based network or via a wireless service. It would protect the interests of the content providers as well as end users. Further it prevents a network carrier from gaining unfair control over increasing aspects of the communications landscape, be it the ISP portion, the infrastructure or the content itself. This will likely turn out to be the major telecommunications battle if, as expected, a new Democratic administration takes office in January 2009. And, as with battles in the past to establish PBS, PEG set-asides, ITVS and the minority-programming services, indie filmmakers will be called to join the fight to protect their interests as media makers and as citizens.