Sidecut Reports

If you bet that Comcast would legally appeal the FCC’s smackdown order, you win. Om has all the details on Comcast’s legal proceedings, with some interesting mumbo-jumbo about how they are complying with the order even as they appeal it.

Since the order itself was relatively toothless, we stand by our earlier call that says the FCC’s order was only the start of the next phase of the net neutrality debate, a process that will truly begin in earnest next year when there should be new players at the FCC and in Congress, ready to rock. Of course, if you want to get caught up on who’s got the juice in matters net neutrality, or get schooled on the historical aspects and changing debate, we’ve got a report to sell you.

With a disclaimer that we here at Sidecut Reports are not lawyers, we nevertheless offer you our speed-reading analysis of the FCC’s full order in the Comcast-BitTorrent case. While most of the top-level details have been known since the FCC’s Aug. 1 vote, the full order does contain a few nuggets we were able to find that may raise some new hackles — while emphatically supporting our opinion that this order is just the start of Phase II of the network neutrality debate, which should get fully underway in 2009.

While Comcast is busy publicizing its own plans for the future (to delay Internet traffic of heavy users), the most interesting information that we see the FCC’s order providing is its request (on Page 33) for Comcast to disclose exactly what kind of equipment it used in its BitTorrent-related management motions, when it was employed, under what circumstances it was used, how it was configured, and where it was deployed. Like we said earlier, we’re not lawyers but it’s probably not hard to guess that disclosing such a granular level of details about its network operations isn’t high on Comcast’s desired to-do list, and will likely be one area that the cable giant will challenge legally.

Or at least try to keep sealed, should Comcast decide not to challenge the FCC’s order in court. While some knowledgeable folks think that a Comcast appeal is a given, several sources we’ve talked to (none at Comcast) note that getting this particular relatively toothless order overturned may lead to some quick rulemaking next year that gives the FCC much firmer legal ground to police such actions. So is the devil you know better than the one you don’t? Fightin’ Joe Waz, the next steps are up to you.

Reading the order so you don’t have to: Feel free to skip the first 22 pages if you already know what this whole mess is about, and could care less about how the FCC justifies its jurisdiction in the case; that’s how long it takes the commission to set the scene, with lots and lots of footnotes that just make these things so hard to read. On page 23 we finally get to the meat, under the title “Resolving the Dispute.” This is where the FCC gets to rip Comcast’s saying that delaying packets isn’t blocking — “We thus find Comcast’s verbal gymnastics both unpersuasive and beside the point.” Smack!

Page 32 is where the most interesting stuff starts — as in, the Remedy. On page 33 you’ll find the “give us all your info” request, along with the “cease and desist” threats if Comcast doesn’t abide by the FCC’s ruling. (You wonder how the FCC would enforce this — “Mr. Roberts, tear down this coax!“) After that it’s just appendixes and bloviating by the commissioners, as if their words here mean more than their votes. Sidecut Take: Not worth your time.

What is worth reading if you need to know more about net neutrality is our recent report, Net Neutrality Phase II: The Battle of 2009. We promise, no footnotes to make you cry as you try to read. And a fun Top 10 list at the end! Order your copy today.

Coming in at 67 pages, the full report on the Comcast-BitTorrent order will take some time to read. We’ll offer our take later, but if you want to give it a go yourself, here is the link to the PDF on the FCC’s site.

Public Knowledge wins the race in getting the first “we approve” email message out today, though we are sure others will follow close behind. If you want something shorter to read in the meantime, check out our Top 10 list of net neutrality influencers, which is without a doubt more fun than the FCC’s order.

Since we couldn’t make it to Aspen this year to participate in the expected discourse on one of our favorite topics — network neutrality — we here at Sidecut Reports humbly offer our “Top 10″ list of net neutrality influencers, the people leading the debate into 2009, what we are calling Phase II of the net neutrality deliberations.

With no further ado, the drumroll please:

SIDECUT REPORTS PRESENTS
THE NET NEUTRALITY TOP 10 INFLUENCERS

The movers and shakers in the net neutrality debate, as of August 2008:

1. Jim Cicconi, AT&T — Still the man with the most pawns and the best grasp of the board.

2. Kevin Martin, FCC Chairman — A lame duck, but with a few big quacks left.

3. Rick Whitt, Google — Looks like Phil Mickelson, and his company plays policy like Phil — sometimes a champion, sometimes hitting from behind the concession stand and off a tree. Capable of major victories, but still not Tiger-solid.

4. Rep. Ed Markey, D-Mass. — Driving the House Bus. A big bus but not a tank.

5. Joe Waz, Comcast — I get knocked down, then I get up again… just like another famous fighter from Philadelphia?

6. Ben Scott, Free Press — Riding the big wave of momentum. How long can the Silver Surfer stay afloat?

7. Lawrence Lessig, Stanford – Always effective as the lone voice storming the castle; can he compromise if he is on the other side of the ruling walls?

8. Tom Tauke, Verizon – Maybe not even the real source of power at Verizon but a former congressman who knows which strings to pull. Can pull hard with Ivan Seidenberg behind him.

9. Blair Levin, Stifel, Nicolaus — If not the next FCC commissioner, he will know who it is before anyone else (and will explain why to Wall Street).

10. Sen. Barack Obama, D-Ill. — First he has to win. Then Reed Hundt’s troops can take over.

Honorable Mention: Tim Wu, Columbia Law School; Kyle McSlarrow, NCTA; Eric Schmidt, Google; Walter McCormick, USTA; Chris Libertelli, eBay/Skype; Gigi Sohn, Public Knowledge; Jessica Rosenworcel, Senate Commerce Committee; Jonathan Adelstein, FCC; Phil Weiser, University of Colorado; Preston Padden, Disney.

Need to know more about net neutrality, or why such leading influencers think that 2009 will be a big year for possible passage of net neutrality legislation? Then order our Sidecut Report on Net Neutrality, which contains complete analysis of the recent FCC decision, as well as a net neutrality timeline and interviews with all the top players in the debate.

Google is upping the ante in the ongoing White Spaces issue, announcing today a public advocacy campaign designed to put pressure on the FCC and Washington lawmakers to free up the so-called “white spaces” of wireless spectrum that exists between broadcast TV channels. While the jury is still out on whether this idea can work technically to everyone’s satisfaction, there’s little doubt that finding more spectrum for broadband communications here in the U.S. is a good idea.

While some folks like Om Malik are pointing a cynical eye at Google’s real intentions, I can’t see how opening the debate on this and other matters broadband is anything but good. If we simply listened to incumbent possessors of spectrum on why it’s too risky to try anything new, we might never have had the Wi-Fi revolution happen the way it did. And sure, Google’s Free the Airwaves idea might produce a lot more silly home-cooked video, but if it ultimately opens up another broadband pipe in this country of duopoly providers, it’s worth the effort.

And if you’re a veteran of D.C. telecom lobbying battles, you know that Google’s new group is light-years different from the telecom “front” organizations that hide their real intentions and backers; on the Google public policy blog product manager Minnie Ingersoll is pretty straightforward when it comes to Google’s motivations:

Google has a clear business interest in expanding access to the web. There’s no doubt that if these airwaves are opened up to unlicensed use, more people will be using the Internet. That’s certainly good for Google (not to mention many of our industry peers) but we also think that it’s good for consumers.

Before any of the next-generation ideas in the white spaces can take place, however, the spectrum needs to be freed up. As we noted in our recent QuickCut Report on WiMax Spectrum, there isn’t a lot of spectrum available right now at the 700 MHz frequency, which is where AT&T and Verizon are planning to launch their so-called 4G networks. So why not free up the white spaces, or at least ask more questions why not? Sure it may mean more money for Google, but in these times of pending metered broadband that seems like a weak reason to oppose the idea.

Great stuff from Declan McCullagh today over at C/Net, in a post where he skewers the ongoing fake-newspaper-editorial efforts of Comcast and others in the net neutrality debate. In case you’re not up to speed on this tactic, it’s a time-honored practice in D.C. — big lobbying money fueling so-called “grassroots” outlets who spew the company line in op-eds that never reveal the writers’ true source of information and cash.

As McCullagh points out with links, the practice works — mainly because a big bunch of journalists and bloggers are too lazy to care, and instead just snarf up whatever press release or “official” sounding thing they see, and turn it into a quick story or post. This sad example (about a supposedly grassroots group asking Congress to investigate the Yahoo-Google search deal) that McCullagh found shows that there are still too few like Declan who are willing to dig behind the scenes, and too many who rubber-stamp officious sounding material without a second glance.

Of course, that is what the astroturf sponsors are counting on. And while we do sense a softening in the net neutrality debate and more acts of cooperation, that doesn’t mean the astroturfing will end. Not as long as there are lazy folks on the front end and shills on the back end to keep the astroturf train running.

As you can tell from our spiffy new button to the right, our promised report on net neutrality — Net Neutrality Phase II: The Battle of 2009 — is now live and ready for ordering via instant download. By combining our long background of reporting and analysis of the issue with interviews of leading legislators, top policy execs from the biggest companies, as well as representatives of the leading public-interest groups, we have produced a definitive in-depth look at the network neutrality issue, which by all accounts is headed for a big year in 2009.

While I’ll get to some of the report highlights in a bit, I want to point out first that here at Sidecut Reports we have no agenda and no skin in the network neutrality game, something that makes us much different from many players in the debate. By trying to stay as objective as possible, our goal was to produce an agenda-free look at network neutrality, which we consider a vital issue in any discussion about the future of broadband, networks, and the digital economy.

So what’s in the 34-page report? Starting with the FCC’s recent order punishing Comcast for its blocking of peer-to-peer applications, our report examines all technical and political parts of the debate, and how proponents and their opponents will position themselves following the November elections. Highlights of the report include:

• Why the FCC’s recent Comcast order isn’t much more than a starting point for the “next phase” of the net neutrality debate
• Why some close observers put the odds of Congress passing some kind of net neutrality legislation “better than even” in 2009, especially if Barack Obama wins the Presidential election
• What the big telcos, AT&T and Verizon, are planning to do and say to prevent passage of any new net neutrality legislation
• How Google and consumer groups Free Press and Public Knowledge are teaming up to educate the public and regulators on why they think there is a need for baseline net neutrality rules
• How any and all outcomes might affect the investment outlook for companies from startups to large service providers
• Why the debate is getting less rhetorical and moving toward more collaboration between opposing sides

The report also contains a network neutrality historical timeline, as well as the Sidecut Reports ranking of the “top ten” individuals influencing the network neutrality debate. The new report is available for immediate download.

In case you are new to Sidecut Reports, a little background: We are an independent editorial research company that provides business professionals with deep background, up-to-the minute information, and decision-making analysis on pertinent topics that goes far beyond blogs at a price far less than that charged by traditional analyst operations. Led by longtime industry journalist Paul Kapustka, Sidecut Reports provides in-depth looks into topics at the intersection of telecommunications, the Internet and public policy. The net neutrality report is our second report, following the release earlier this year of our Sidecut report on WiMax, which looks at the current market for WiMax wireless services in the U.S.

As we finish up the editing chores on our coming (now live!) Sidecut Report on net neutrality, we wanted to share with you now an email Q-and-A with Rep. Edward J. Markey (D-Mass.), chairman of the House Subcommittee on Telecommunications and the Internet, while last week’s FCC Comcast ruling was still fresh in everyone’s mind.

Sidecut Reports: You have been a passionate advocate for network neutrality for quite some time now. Can you describe what motivated your interest in the topic, and why it became a priority for your office?

Rep. Edward J. Markey: When I was chairman of the Subcommittee on Telecommunications and the Internet back in the late 1980s, I successfully beat back an FCC proposal that aimed to levy per-minute access charges on enhanced services, such as Prodigy, Compuserve and others. My argument was that rather than subjecting the emerging “information industry” to such fees, policymakers should instead seek ways of nurturing access to such information. Winning that fight is the reason we have flat-rate Internet pricing today and this has helped to make the Internet wildly successful with consumers across the country.

Making sure we get policy questions right helps to allow the geniuses at the edges of the network innovate. Network neutrality is in many ways simply a battle against the certain incumbents’ latest attempts to levy new fees or otherwise constrain innovative new competitors. I’ve spent years actively exploring the future of new media technologies. I’ve been an outspoken advocate of promoting choice and innovation, including minority ownership, diversity and localism, in all areas of telecommunication policy.

I believe that an open, non-discriminatory experience on the Internet continues to be vital for consumers and innovators to reap the benefits of this wildly successful medium. The Internet’s role as an economic and cultural phenomenon must be protected by ensuring that the American people are free from unreasonable discrimination by broadband network providers.

Sidecut Reports: Given the distractions for elected officials in a Presidential election year, why did you decide to introduce legislation this year? Might such legislation have a better chance of passing or have a better chance of reasonable debate at a later time?

Rep. Markey: I offered my legislation, the Internet Freedom Preservation Act of 2008 (H.R. 5353), now because preserving the openness of the Internet and protecting our global competitiveness is an issue that I believe needs to be front and center in any telecommunications debate, and it obviously helps to educate the public about the issue even as we look to next year for more progress.

Sidecut Reports: While policy and communications are inevitably intertwined, at what level of priority should communications legislation be for voters, given other pressing social and economic issues?

Rep. Markey: Telecommunications policy is critically linked to social and economic issues. The World Wide Web has become indispensable to companies large and small, regardless of whether their commercial aspirations are locally-oriented or of global proportions. Voters recognize that the Internet has no peer in its ability to foster innovation and provide low barriers to entry for new ideas and businesses.

Sidecut Reports: You seem to be in the Congressional lead for using social media tools like YouTube to increase communication between Washington D.C. and the rest of the country. What is the level of technological acceptance among your peers, and how does that affect the debate of issues like network neutrality?

Rep. Markey: For me, the use of new technologies, like YouTube, has enabled me to communicate with my constituents in new and exciting ways. Congress as a whole is increasingly embracing new technologies (beyond just the requisite Blackberry) from Twitter to Second Life. My goal in the Subcommittee is hold hearings to further highlight the benefits of these technologies and important policy questions that need to be resolved.

Rep. Markey’s responses will be part of our upcoming report, along with excerpts from a long string of interviews with top policy execs from AT&T, Google, Verizon and Comcast, along with leaders of top public-policy consumer groups like Free Press and Public Knowledge. For an email note when the report is ready, drop me a line to kaps at sidecutreports.com.

As expected, the FCC went through with its wrist-slap of Comcast today, voting 3-2 in favor of calling Comcast naughty for its BitTorrent-throttling efforts. Here’s the official release from the FCC, which basically tells Comcast to stop using the management techniques in question, explain its techniques more clearly to the FCC and to users, and to detail how it will do things differently in the future.

Wow, some penalty!

Given that Comcast has already publicly stated that it doesn’t use the packet-reset technique anymore, and is moving to more open, protocol-agnostic measures, some of today’s action may seem like a moot point. But while the order itself may not amount to much, it is significant as a turning point in the overall network neutrality debate — serving as a marker of where the issue turned from theoretical to discussions of a more practical nature about what reasonable network management might be, how it might be disclosed, and who might best adjucate potential complaints or infractions going forward. We will explore all these bigger themes as well as the expected legal, legislative and regulatory tussles coming in 2009 in our upcoming Sidecut Report on net neutrality, which should be available early next week. (If you want an email update when the report is available, ping me at kaps at sidecutreports.com.)

In the meantime, we’ll leave you with a quote from FCC chairman Kevin Martin, courtesy of the Twitter stream from our pal Drew Clark, who attended the meeting:

If we aren’t going to stop a company that is looking inside its subscribers’ communications, blocking that communication when it uses a particular application regardless of whether there is congestion on the network, hiding what it is doing by making consumers think the problem is their own, and lying about it to the public, what would we stop?

Good question!

Other reports: Stacey over at GigaOM has a comment from Comcast; Declan McCullagh at C/Net has some more details on the legal underpinnings of the order; we have received the public statements from both Verizon and AT&T, which both laud the FCC for its decision and go on to say that clearly, no new net neutrality regulations or laws are needed. And Rep. Ed Markey (D-Mass.) sent us a note that also praised the decision but ended with the following statement:

I intend to continue monitoring practices in the industry and pressing for passage of my legislative framework for addressing these issues in the months ahead.

To answer your question — yes, the network neutrality debate is back with us again. Get ready for Phase II!

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With all the excitement around the Comcast Order sure to break at Friday’s FCC meeting, if we can’t get on the webcast we’ll watch Drew Clark’s tweets from the proceedings… heck, we’ll watch Drew’s tweets anyway, because they are sure to contain all his great analysis that the stale webcast won’t provide.