Sidecut Reports

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.

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!

.

There’s really no need to get confused about the coming FCC condemnation of Comcast’s anti-BitTorrent practices. In fact, it’s pretty simple to figure out when you understand that it’s just Kevin being Kevin, albeit in a much more understated fashion than the man who made that phrase famous.

If you understand that A) Martin has always been a friend of the telcos first, then you understand that any chance to slap at the cablecos is fair game, even if it means crossing traditional GOP voting lines to side with the FCC’s two Democrats. If you further understand that B) at the current point in the net neutrality debate, the telcos don’t want any new regulations or laws, then you also understand that it behooves them to have it shown that the FCC’s 2005 Internet policy statement — previously called not enforceable by Martin himself — is all the authority the FCC needs to police such infractions.

So yes, Kevin, go ahead and call Comcast out for practices it has probably already stopped using, and won’t ever use again. And then don’t say anything about metered services, or paying for QoS or traffic prioritization. Save that for the next chairman!

While we are waiting for the actual order to come out this Friday, we suspect there won’t be much beyond a prosaic hand-slap, and certainly not the hammer some have called the pending order. The real action won’t come until there’s a new President, a new FCC and a new Congress. Look for more from us about “Phase II” of the network neutrality debate, as soon as we can after the FCC commissioners cast their votes on Friday.

We now have an official “starting date” for round two of the net neutrality debate: Aug. 1, when the details of the FCC’s order against Comcast should be made public. News reports Thursday said that FCC chairman Kevin Martin is expected to announce on that date some form of penalties and punishment for the cable operator’s now-infamous blocking actions of peer-to-peer traffic on its broadband networks; but instead of putting a close to the matter, the FCC order is widely expected to just be the start of a fresh round of net neutrality gymnastics, which likely won’t reach a conclusion until after the November elections and into 2009, when the FCC will likely have a new cast of commissioners.

Though Martin said Friday he wouldn’t seek any fines against Comcast, the devil will be in the details of the order, especially the specifics about how Martin interprets how Comcast might have violated the FCC’s 2005 Internet policy principles order. The most immediate question after the order is released is whether or not Comcast will file a lawsuit against the FCC, challenging the agency’s jurisdiction over cable operators; as our analyst friends at Stifel, Nicolaus said in a note today, such legal actions may not be the best move for Comcast, since if the company was victorious in having the order revoked, it could spur Congress into taking more direct net neutrality action, passing legislation giving the FCC clear authority over cable operators.

There are also questions about how the order might affect operators of wireless networks, and how a new President and new Congress will deal with the issue going forward. To quote the conclusion of the Stifel, Nicolaus report today, no doubt penned in part by our good friend Blair Levin:

We see the real significance in how the order and the subsequent court decision sets the stage for how the new Congress and the new FCC may wish to address the wider network neutrality issue.

Sounds like a perfect time for a Sidecut Report on net neutrality, giving you all the background info on the issue as well as in-depth interviews with major players on both sides of the debate, along with analysis on how the topic will affect businesses, entrepreneurs and investors in entities that will be affected by new communications legislation or regulation. If you’d like an email notification when our report is ready, drop me a line at kaps at sidecutreports.com and I will ping you personally.

From the looks of it, the second round of the Net Neutrality debate is going to be a lot like the first: Lots of blather and not a lot of attention paid to facts, as warring factions try to tilt public perception in their favor. Surprising? Hardly, given the stakes of the game. Disappointing? Certainly, especially for those who were hoping that there could be more consensus-building discussions instead of the he-said/she-said arguing of the past, which hasn’t really served either side well.

Today’s editorial by Richard Bennett in the San Francisco Chronicle is a case in point: While Bennett, a self-proclaimed networking expert, makes valid points about the need for regulators to closely examine the market power of Google’s search advertising deals, his emotional one-offs on several items raise two red flags: Not only are some of them inaccurate, but their almost word-for-word mimicry of similar opinions voiced recently by the major telcos, AT&T and Verizon, shows there might be more to his argument than just the concerns of an average netizen.

In recent interviews for our upcoming Sidecut Report on Net Neutrality, I was reminded once again just how good the telcos are at playing the lobbying game by synchronizing their messaging. In separate interviews at the recent NXTcomm show, the top policy execs for both big telcos — AT&T’s Jim Cicconi and Verizon’s Tom Tauke — both stressed the ideas that A) the Net Neutrality debate was started by, and mostly run by, Google; and B) that privacy concerns, especially those related to online advertising, were a much bigger problem than net neutrality, which was already being solved anyway by business-to-business solutions. Clearly, I thought, these are the new marching orders for the telco side of the issue.

Both those ideas are embodied in Bennett’s essay, in which he accuses Google of a “political head-fake,” using net neutrality to distract regulators from the privacy concerns. I would posit that you could flip that coin on its head, and say that it’s the telcos who are raising a big stink about privacy in order to try to move net neutrality to a back burner. To me, they seem like two separate issues that should be resolved on their own merits. But neither am I naive! Welcome to Net Neutrality, Round Two.

While I still hope to interview Bennett for the upcoming report — it’s clear from his writing and public testimony that he knows more about networking than your average law professor — there are several points in his column that shouldn’t go unchallenged. The first is his claim that net neutrality is a topic that “Google thrust into the political spotlight two years ago.” The reality is that Google, if anything, was late to the game and supremely unorganized in its approach to net neutrality, not really getting its act together until it hired former MCI lobbyist Rick Whitt in early 2007. If anything, it was former AT&T CEO Ed Whitacre’s not on my pipes bromide that made net neutrality a front-page topic, more so than anything Google did or said.

Bennett also says Google gets a free pass from the tech press, and that despite its “squeaky-clean” image, Google also has relations with “Washington power brokers,” perhaps an attempt to sketch Google as some nefarious broker of back-room deals. I’m not sure where Bennett is reading his so-called “cheerleading” for Google — most everything I can find in searches on the topic are straightforward, balanced news accounts, with plently of growing cynicism about Google and its endeavors in things like Street View. My pal Om has been anything but a Google cheerleader, like others questioning how Google will square its open networking ideals with the exclusive partner deals that were part of its $500 million investment in WiMax provider Clearwire.

On the D.C. influencer side, all I can say is it wasn’t Google who convinced Congress to change its mind and grant immunity to telcos in their FISA-related lawsuits. According to AT&T’s Cicconi, he oversees a staff of some 700 people. Google’s Whitt, on the other hand, is one of only three Google people “on the Hill,” and he is still the only one with a focus on the FCC. So who exactly is to be feared in Washington?

You could keep picking Bennett’s essay apart — claiming Google had “largely abandoned” net neutrality earlier this year is just laughable — but at some point you just get tired of the game, and wish there was a better way. Fortunately, many of the other players on both sides seem to be eager to work together to find solutions that don’t require political endgames; today’s surprise agreement between Vonage and Comcast to work together on networking concerns is just another signal that maybe there is a better place for the debate, centered around what is reasonable network management, and how it can be achieved so that both sides feel their concerns have been considered, and become part of the implementation. Other interviews we’ve done with folks like Public Knowledge and Comcast reflected such ideas.

Given Bennett’s past calls for more technical expertise and less political interference in debates about matters Internet, it’s surprising to read that he now thinks that regulators, and not market players, should intervene. But it is pretty clear who agrees almost exactly with everything he says today.

“The carriers try to frame this as being between themselves and Google — I’m a veteran of MCI so I saw this in the ’90s,” said Whitt in our recent interview. “They came after MCI as the poster child of the CLEC side, and unfortunately, they did a pretty good job.”

Will the same game work again? That will be one of the questions we ask in our upcoming report, which unfortunately has been slowed a bit by my recent surgery. If you want an email update when it’s ready, drop me a line at kaps at sidecutreports.com and I will ping you when it’s done.

Is there such a shortage of news around telecom public policy that normally respectable information outlets still fall so easily for astroturf announcements? If you are a Comcast lobbyist you just have to love the official sound of the lead graf in this non-news missive from IDG “news” service, which asserts that “a coalition of seven civil rights groups” is now banding together to fight off the resurrection of network neutrality, mainly in reference to the recent FCC hearing about Comcast’s network management practices.

C’mon. Please. Does anyone really believe anymore that the National Black Chamber of Commerce, Latinos in Information Sciences and Technology Association, League of Rural Voters, and National Council of Women’s Organizations just happen to have the same viewpoints on net neutrality and cable network management? Or maybe, they are all BFF and on Facebook together, and said “hey, we really need to work together to ensure our voices are heard.”

Right.

Or maybe, they are all organizations that get substantial contributions from large telecommunication companies or cable providers, whose legislative agendas just happen to mesh with those of the civil rights groups. (Or maybe they all just use the same policy PR firm, whose prinicpals have been at this a long time.)

C’mon, InfoWorld. C’mon, Mike. Do some digging before you post — the scoop on these outfits is already out there thanks to the fine work of Bruce Kushnick and many others.

While the Bell companies have been somewhat legendary in their Astroturf funding, a little digging shows that some of these new groups are doing a lot of letter-writing on behalf of cable companies. The National Congress of Black Women, for example, is no friend of AT&T’s — but they seem to be well versed in the arcane subject of video franchising laws and now, apparently, in network management as well.

The point here is not to say that telcos and cable companies don’t have an argument; I think there should be some meaningful debate between the actual parties involved (perhaps at a national broadband summit?), where needs of both sides can be discussed and perhaps some common ground found. And this is not meant to belittle the national groups, some of which no doubt perform important work to ensure that civil rights are continually advanced and upheld. But it’s lame to argue, as the “coalition” does, that:

Network management promotes free speech by ensuring that all online content and applications flow freely over the Internet and are not thwarted by a few heavy users of peer-to-peer (”P2P”) file-sharing services.

As the kids say nowadays, that is fail.

Remember, Astroturf only works if you let it work.

Could Comcast step into it any deeper? Sure, according to this report, which quotes Comcast as saying it paid people to save places in line for those waiting to attend the FCC hearing at Harvard Monday.

That’s sad enough, but it even went farther, according to Portfolio’s Sam Gustin, who reports:

Some of those placeholders, however, did more than wait in line: They filled many of the seats at the meeting, according to eyewitnesses. As a result, scores of Comcast critics and other members of the public were denied entry because the room filled up well before the beginning of the hearing.

Now that’s network management in real time, eh?

Gotta love the photo! (courtesy of Free Press, which has its own report on the seat-blocking) Gripping stuff, that net neutrality debate.