Out of Control

In “The Net at Risk,” journalist Bill Moyers and his team feature plenty of speakers who advocate government regulation of the Internet to protect consumers, including a 10-minute segment where Moyers lobs softball questions at Mark Cooper, research director for the Consumer Federation of America, an organization that feels no aspect of American commerce is regulated enough. Unfortunately, the program lacks any discussion about the consequences to consumers that might result from these policies nor how they will make their broadband experience measurably better.

For starters, “The Net at Risk” provides no context as to why broadband, telecommunications and Internet policy have become so important and why they have attracted so much attention and involve so many interests. The report presents the convergence of cable, phone, wireless and Internet as something consumers should fear and Congress must regulate, but fails to acknowledge that consumer demand for new types of information services is driving this convergence.

The program also makes no effort to discuss the huge changes that have occurred in the telecommunications industry since the end of the AT&T monopoly in 1984, including the number and variety of new service providers or the amount of private investment that accounts for much of the Internet infrastructure consumers use today. While Moyers and reporter Rick Karr fret about the size and influence of corporations from AT&T to Comcast to Google, they make no effort to explain what they do, where they fit in the broadband industry, or what their business objectives are.

By failing to understand and address the reasons for industry convergence or the roles of the various players, the report trips itself up. For example, while its titular claim is that Internet is “at risk,” the program can’t seem to put a finger on which companies constitute an actual threat. At one point, within a ten-minute stretch, Karr claims, in turn, that three distinct segments--the telephone companies, the cable companies and the big media companies—are nearing monopoly control of the Internet. Well, which group is it? Karr’s scattergun approach of accusing what amounts to more than a dozen different companies of “dominating” the Internet only emphasizes the large number of players that, dare we say, are competing aggressively within the information supply chain as a whole.

The report focuses on three specific policy points – network neutrality, municipal broadband and media consolidation. In each case, facts are selective and the policy downsides completely ignored.

Network Neutrality

Without network neutrality, “The Internet at Risk” tells us, our First Amendment rights on the Internet will be lost. This is nonsense. Every day it gets easier and cheaper to be heard on the Web. “The Internet at Risk” does not mention the low cost of web hosting, off-the-shelf blogging software or even free sites like MySpace.com (which groups like the Christian Coalition, despite its on-screen support for net neutrality, want regulated, if not banned).

The quality and prioritization that carriers want to offer certain commercial Web sites are designed to make bandwidth-rich applications such as video, gaming, not to mention distance learning and telemedicine, two services highlighted in “The Net at Risk,” work better. The existence of an Internet fast lane won’t squelch the lone blogger. It’s more likely smaller sites will benefit because high-capacity users have been partitioned off the “best effort” Internet.

Instead, the report leans heavily on a lot of unfounded talk about Internet censorship. Although its been 14 months since the FCC said net neutrality guidelines did not apply to Internet services from the phone companies (and much longer for cable), there has been no single instance of an Internet service provider, phone or cable company intentionally blocking or filtering any web site for reasons of content. The only instance of application blocking—when a tiny ISP in North Carolina blocked an Internet calling site—was halted by FCC order.

Without providing any evidence of a problem, “The Internet at Risk” featured speaker after speaker endorsing government regulation of the Internet, giving the impression that this regulation is necessary and that the only opposition comes from a handful of phone companies. The report ignores that legislated network neutrality would give the government unprecedented control over the speed, quality and reliability of every Web application. By failing discuss the consequences network neutrality would have on Internet commerce, applications development and network evolution, Moyers does viewers a great disservice.

Municipal Broadband

“The Internet at Risk” features a lengthy segment on the $125 million plan in Lafayette, La., to build a municipal broadband network that would run fiber optic cable to every home in that city of 110,000.

The segment contains a number of distortions and omissions. It leaves unchallenged a claim by Lafayette Parish President Joey Dural that without a municipal effort, it would be “20 to 30 years” before Lafayette residents were upgraded to fiber. Cox and BellSouth are installing fiber networks today. It notes that the project, approved by voters in July 2005, has been held up in court by BellSouth, which fears unfair competition. This is true to an extent. BellSouth indeed brought the case. As for unfair competition, the Louisiana courts agreed. Twice so far, state courts have struck down the Lafayette fiber financial plan because it backs the fiber bonds with revenues from its electric utility, a structure that violates a state law that prohibits funds from a regulated monopoly operation from being use to support a competitive service.

By failing to provide all the facts behind the delay in Lafayette, Moyers also avoids addressing the enormous financial problems municipal fiber has faced everywhere else its been attempted. Most systems end up unfinished, deeply in debt, and with their cities’ credit ratings in shambles. “The Internet at Risk” does not mention muni fiber disasters in Ashland, Ore., halted after racking up $180,000 in debt ; Lebanon, Ohio, put up for sale after incurring $10 million in debt; or Marietta, Ga., sold for $11 million after spending $35 million.

Also, far from being on the leading edge as the program suggests, Lafayette to date has been the last city to propose a municipal fiber system. The new trend, ignored by “The Internet at Risk,” has been for city government to shy away from the documented risks of municipal ownership and strike deals with commercial service providers, mostly for wireless networks.

Media Consolidation

“The Internet at Risk” presents media consolidation, particularly among radio networks, as anti-consumer and anti-democracy, yet ignores discussion as to the changes in consumer habits that are sparking this trend. Local newspaper readership and radio listenership is declining. For consumers, television, and increasingly the Internet, is a preferred source of news. Meanwhile, young people are choosing their own iPod playlists instead of radio. As regrettable as some may find this shift, media owners have no choice but to react to the declining value of their properties.

While there is some validity to the report’s claim that broadcast consolidation has led to less attention to local markets, the alternative to acquisition would likely have been dissolution--the local station would have ceased operating. Government regulations against consolidation—clearly favored by the program--won’t conjure up ad dollars or increase circulation. Further, the program’s claim that the Internet cannot replace local coverage is debatable. Nicholas Lehmann, in a two-part New Yorker article August 7 and 14, points to the vigorous growth of the Web as an outlet for local information and reporting.

In terms of broadband and the Internet, Moyers and his team clearly want to make the case that consumer interests and corporate interests are in direct opposition. In the end, however, “The Internet at Risk” offers no hard evidence that consumers are being harmed, just supposition. It avoids all discussion as to the consumer decisions and buying habits that are forcing industry convergence and consolidation. Instead it presents both as inherently bad trends that must be halted or tempered through government regulation and interference, without showing in concrete, measurable terms how consumers will benefit.