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New FTC Boss: Tough On Broadband's Duopoly?
Leibowitz chats up broadband, net neutrality, privacy...
by Karl Bode Tuesday 12-May-2009 tags: legal · competition · business · Op/Ed · legislation · Politics
Tipped by blips See Profile
When it comes to consumer issues like broadband and network neutrality, the FTC in recent years has spent most of its time nodding dumbly at carriers, allowing them to "self-regulate." The idea that corporations can effectively monitor themselves for bad behavior has been taken to extremes over the last few decades across numerous industries, with some obvious recent disastrous effects. Self-regulation has become a code word for allowing companies to do whatever they'd like.

Of course the agency has engaged in showmanship to convince the public it's really the consumer's best interest they're looking out for. They've spent a lot of time issuing reports on broadband competition that do little but repeat carrier talking points, insisting that the broadband market is highly competitive. They've also enjoyed holding broadband and network neutrality round table hearings that are equally devoid of substance and lacking consumer advocacy participation. Meanwhile, the agency never sees a merger it doesn't like.

There's been some suggestion that Obama's appointment of Democratic FTC Commissioner Jon Leibowitz to the top FTC spot could change things. Will the FTC evolve from a dummy agency that occasionally issues wrist-slap fines on spyware vendors into a consumer-protection watchdog with a little teeth? In an interview this past weekend with CSPAN, Leibowitz (a former MPAA lobbyist) says all the right things, and hints at the FTC playing a bigger role in telecom on issues like privacy, advertising and net neutrality:

"We believe consumers need to have notice and consent about what they’re getting. It’s very, very important that these providers tell consumers about the speed they’re getting, and whether (ISPs) are making any types of management decisions in terms of the network that affect consumers."

At around the eleven minute mark he clearly admits to a lack broadband competition, so that's certainly progress from the denial-prone FTC of recent years:

"In a perfect marketplace where you had more competitors, you wouldn't need the government necessarily to be terribly involved. Particularly in the consumer protection area, we have a big roll to play. Broadband is a deregulated product. That's good, we like deregulation generally. But when you have deregulation, you also have law enforcement to make sure people do the right thing."

Traditionally the FTC hasn't been particularly good at enforcement, and we won't know if Leibowitz is an upgrade for consumers until he starts taking clear stands on policy issues.

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rdmiller

join:2005-09-23
Richmond, VA

Where's the beef?

I don't know what to say! There's nothing here for me to get agitated about.

baineschile
2600 ways to live
Premium
join:2008-05-10
Sterling Heights, MI
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·Comcast

Regulation

Why should the government have to regulate TV and Broadband companies? Neither are a necessity to live (I know there will be arguments about this), but there are tons of people in the USA who dont have a TV or a computer, and do just fine.

If one of these companies step out of line, the consumers will speak with their wallets.

If we do want to classify broadband as a utility, it means it will be government owned, thus saturated and unmoving.

S_engineer
Premium
join:2007-05-16
Chicago, IL

Re: Regulation

said by baineschile:

Why should the government have to regulate TV and Broadband companies?
because the vomit they propagate ends up forming policy!
Network Guy
Premium
join:2000-08-25
New York
Reviews:
·Optimum Online
Would you feel shafted by your elected officials if an FTC didn't exist to regulate energy companies?

Don't know about you, but I would feel pretty pissed if the electric went out every day but still paid well above energy market pricing for the utility.

Kinda the same thing with broadband. It's a good thing people no longer pay $300 per month for a 128k ISDN line as the only means to network access.
elray

join:2000-12-16
Santa Monica, CA

Re: Regulation

said by Network Guy:

Would you feel shafted by your elected officials if an FTC didn't exist to regulate energy companies?

Don't know about you, but I would feel pretty pissed if the electric went out every day but still paid well above energy market pricing for the utility.

Kinda the same thing with broadband. It's a good thing people no longer pay $300 per month for a 128k ISDN line as the only means to network access.
Hmm.

When California was being squeezed by a few companies in Texas back in 2001, the Federal Regulators did nothing.

Your $300 128K ISDN service was regulated too.
Network Guy
Premium
join:2000-08-25
New York
Reviews:
·Optimum Online

Re: Regulation

said by elray:

When California was being squeezed by a few companies in Texas back in 2001, the Federal Regulators did nothing.
Back in the 90s in NYC when people felt anally raped by the incumbent energy provider, Consolidated Edison, some brilliant mind introduced ESCOs that in essence played middle man between your meter and the local grid. Lower kilowatt rate meant energy savings, right? Except there's still that pesky delivery and transport portion of that bill, and guess who still charges that? You got it, ConEd.

So in essence the FTC once again failed, yes.

With broadband I think demand and increasing number of network providers pressured prices down. FTC was successful in forcing the incumbents to stop sabotaging the competition, but didn't force a pricing model that wouldn't price them out of business. So yea, again FTC failed.

In the end, we all drop our shorts and take it. We can't live without broadband, right?
asterisk20xx

join:2008-04-22
Marshall, TX
Don't be too sure about that. Just 6 months ago I was paying $120 a month for 128k ISDN. It was either that, dialup or a T1.

I tried really hard to use the internet at 128k. Disabling all images (not just ads), scripts, and flash, just to make it almost tolerable.

I eventually caved in and have a $407.18 per month T1 line.
tdouglas22

join:2001-09-25
Memphis, TN
said by baineschile:

If we do want to classify broadband as a utility, it means it will be government owned, thus saturated and unmoving.
Really? How so? If the companies were more concerned with providing the best service and less focused on the bottom line then there would be no need or desire for the government to step into this mess.

lakerfan82

join:2009-01-30
Corona, CA

Re: Regulation

said by tdouglas22:

said by baineschile:

If we do want to classify broadband as a utility, it means it will be government owned, thus saturated and unmoving.
Really? How so? If the companies were more concerned with providing the best service and less focused on the bottom line then there would be no need or desire for the government to step into this mess.
Why shouldn't a company be focused on the bottom line? If a company isn't generating enough revenue, who in their right mind is going to loan them the money they need to make infrastructure investments? As evidenced by the Charter mess, the banks and stockholders quickly disappear when a company fails to make enough revenue.

Beside that point, there's no question in my mind that we need more competition. However, heavier regulation will do nothing to spur competition. The biggest question is, what can be done to spur competition in the broadband market?
tdouglas22

join:2001-09-25
Memphis, TN

Re: Regulation

It's one thing to focus on the bottom line but when you do it at the cost of your customers then your doing bad business. Anyone who runs a successful business can tell you that if you do something you really want to do and you truly are focused on providing the service to your customer base, you will make LOTS of money.

Maybe they should focus on EXPANDING their networks and reaching out to the rural residents. I know it may seem cliched but if you build it out, they WILL come.

lakerfan82

join:2009-01-30
Corona, CA

Re: Regulation

said by tdouglas22:

Maybe they should focus on EXPANDING their networks and reaching out to the rural residents. I know it may seem cliched but if you build it out, they WILL come.
The only way for them to do that is to have a healthy bottom line. Furthermore, maybe they will come, but there typically isn't ENOUGH of them in rural areas to make it worth the investment.
tdouglas22

join:2001-09-25
Memphis, TN

Re: Regulation

said by lakerfan82:

said by tdouglas22:

Maybe they should focus on EXPANDING their networks and reaching out to the rural residents. I know it may seem cliched but if you build it out, they WILL come.
The only way for them to do that is to have a healthy bottom line. Furthermore, maybe they will come, but there typically isn't ENOUGH of them in rural areas to make it worth the investment.
Depends on what method they use to expand. If land lines are not an option they could also look deeper into expanding wireless options. The tech is there but not enough investors to help it mature fast enough.

Ignite
Premium,VIP
join:2004-03-18
UK
said by lakerfan82:

Why shouldn't a company be focused on the bottom line? If a company isn't generating enough revenue, who in their right mind is going to loan them the money they need to make infrastructure investments? As evidenced by the Charter mess, the banks and stockholders quickly disappear when a company fails to make enough revenue.

Beside that point, there's no question in my mind that we need more competition. However, heavier regulation will do nothing to spur competition. The biggest question is, what can be done to spur competition in the broadband market?
Most other industries a company as heavily leveraged as Charter would have gone bust way before now, only the industry they are in that kept them out of Chapter 11 for this long.
Skippy25

join:2000-09-13
Hazelwood, MO
Right... because right after the 1996 act was put in place and the incumbents began dismantling it with the help of the FCC's incompetence (which gave them all this freedom - lack of regulation) the competitions has just flourished hasn't it?

Now there are a whole lot less ISP's and even though the cost to deliver broadband has gone down, prices have continued to rise. In addition, at best a vast majority of the people have MAYBE 2 choices (DSL or Cable) if any at all. You may call that competition, I and most people will call that pathetic.

I would highly recommend the report: Dismantling Digital Deregulation

lakerfan82

join:2009-01-30
Corona, CA

Re: Regulation

said by Skippy25:

Right... because right after the 1996 act was put in place and the incumbents began dismantling it with the help of the FCC's incompetence (which gave them all this freedom - lack of regulation) the competitions has just flourished hasn't it?

Now there are a whole lot less ISP's and even though the cost to deliver broadband has gone down, prices have continued to rise. In addition, at best a vast majority of the people have MAYBE 2 choices (DSL or Cable) if any at all. You may call that competition, I and most people will call that pathetic.

I would highly recommend the report: Dismantling Digital Deregulation
Competition didn't flourish before the 1996 act either. Get your head out of the sand. I've already stated that we need more competition, where did I say that we currently have enough competition? The question remains, how do we encourage additional competition to enter the marketplace?
Skippy25

join:2000-09-13
Hazelwood, MO

Re: Regulation

On the current system: You regulate it. You require line sharing on ALL transports and you cap what they can charge to lease that. That is in addition to officially making them the dumbpipes they are and need to be. No serving content if you want to be the transport and no being the transport if you want to serve content.

Personally, I would like them to build 1 nationwide network that ANY service provider that wants to lease the line to any customer to sell them any service they want to buy.

lakerfan82

join:2009-01-30
Corona, CA

Re: Regulation

said by Skippy25:

On the current system: You regulate it. You require line sharing on ALL transports and you cap what they can charge to lease that. That is in addition to officially making them the dumbpipes they are and need to be. No serving content if you want to be the transport and no being the transport if you want to serve content.

Personally, I would like them to build 1 nationwide network that ANY service provider that wants to lease the line to any customer to sell them any service they want to buy.
So basically you are saying if a company built a network, they can ONLY be an ISP? They can't be an ISP AND a video provider? In the case of Verizon, they build a huge fiber optic network, but they can't pay for it by selling video? That is complete nonsense.

A nationwide network is even worse. You are basically suggesting that the gov't build a network and then lease it out to whoever wants to use it. I can just see it now. First, they will debate for years what kind of technology to build the network and by the time they get around to building it (with expensive union labor and plenty of cost overruns) years later, the technology will be 15 years obsolete. They will start leasing capacity on it at below true market value prices (to be sure that people actually use it, and because no one in rural Timbuktu should have pay the real cost of running that network to their door). Since prices are below market value, everyone and their brother will be online downloading torrents and watching Netflix. Subscriber fees will do little to defray the true cost of providing this bandwidth and its maintenance and you can forget about upgrades. At that point they will either be forced to raise prices or ration bandwidth.

But hey, at least EVERYBODY has internet access, right?

LightS
Premium
join:2005-12-17
Greenville, TX
Reviews:
·Time Warner Cable
·RoadRunner Cable

Re: Regulation

At least EVERYBODY has internet access, right?

You're missing something. We live in, my opinion, the most influential nation in the world. I don't want to get into any debates about that, so I'll move forward --

EVERYBODY SHOULD HAVE THE OPTION TO GET BROADBAND INTERNET. There should be no question as to that, it should be a national effort to be able to provide any customer who has a desire to purchase broadband. Why should only major cities, such as NYC & Chicago get the massive upgrades & line capacity that they're enabled too? Why are they bothering to upgrade that, when they could be spending that same amount of $$ on spreading internet to places that are being dominated by either a monopoly or duopoly.

I'm not saying progress shouldn't be made, but what good is progress if not everybody can enjoy it?

lakerfan82

join:2009-01-30
Corona, CA

Re: Regulation

said by LightS:

At least EVERYBODY has internet access, right?

You're missing something. We live in, my opinion, the most influential nation in the world. I don't want to get into any debates about that, so I'll move forward --

EVERYBODY SHOULD HAVE THE OPTION TO GET BROADBAND INTERNET. There should be no question as to that, it should be a national effort to be able to provide any customer who has a desire to purchase broadband. Why should only major cities, such as NYC & Chicago get the massive upgrades & line capacity that they're enabled too? Why are they bothering to upgrade that, when they could be spending that same amount of $$ on spreading internet to places that are being dominated by either a monopoly or duopoly.

I'm not saying progress shouldn't be made, but what good is progress if not everybody can enjoy it?
Being in the most influential nation in the world has nothing to do with how many people have internet.

Your opinion that everybody should have the option to get broadband is just that, an opinion. Not everybody believes that broadband is a right, cause its NOT. Furthermore, everybody does have the option to get broadband, nobody is forcing people to live in areas without broadband. If broadband is so essential to a particular person's way of life, then they need to move to an area that can serve their broadband needs. Its not everyone else's responsibility to provide that person living out in the boonies with broadband.

LightS
Premium
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Greenville, TX
Reviews:
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Re: Regulation

said by lakerfan82 See ProfileBeing in the most influential nation in the world has nothing to do with how many people have internet.

Your opinion that everybody should have the option to get broadband is just that, an opinion. Not everybody believes that broadband is a right, cause its NOT. Furthermore, everybody does have the option to get broadband, nobody is forcing people to live in areas without broadband. If broadband is so essential to a particular person's way of life, then they need to move to an area that can serve their broadband needs. Its not everyone else's responsibility to provide that person living out in the boonies with broadband.
[/BQUOTE :


You miss one of my points -- It's 2009. I personally think that it's unacceptable to not be able to receive some sort of broadband, whether it's via wifi, cable, DSL. (I don't even consider Satelite broadband.)
Whether they want it or not, the option should be there.
Internet, in my opinion, will eventually be considered a utility.

You say that nobody is forcing people to live in areas without broadband, that's completely irrelevant. They can be provided with Electricity, water, telephone, and all the other utilities -- I feel that high speed internet should eventually, be the same way.
bakorican

join:2004-02-28
germany
said by Big Pete 829 :

However, heavier regulation will do nothing to spur competition.
What FACT do you have to supports this allegation??

lakerfan82

join:2009-01-30
Corona, CA

Re: Regulation

The FACT is incumbents love a lot of red tape because it protects their business model. Look at the Cable Cos who fought tooth and nail to keep local video franchises instead of deregulated statewide franchises. AT&T and Verizon basically refused to build their networks in heavily populated New York and California until the local video franchises were abolished. The FACT is heavy regulation keeps new competition out of the marketplace.

The same goes for any other type of business. You can look at the Taxi business and the heavy fees they pay. Yellow basically has a monopoly. Another example is minimum wage laws. Why is it that you never see Walmart complaining about minimum wage laws? First of all, Walmart doesn't have a single employee that is paid minimum wage. 2nd, because Walmart is so big, they can afford to pay their employees a few bucks more every few years. Who does minimum wage affect the most? The mom & pop shop down the street. They either have to raise their prices, layoff employees, or close up shop. They don't have the luxury of competing on price and their margins are already razor thin.

So yes, additional regulation will almost always keep new competitors out of the marketplace.

TamaraB
Question The Current Paradigm
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join:2000-11-08
Da Bronx
Reviews:
·Optimum Online
·Clearwire Wireless
said by baineschile:

... If one of these companies step out of line, the consumers will speak with their wallets. ...
This only works where there is a choice. Where I live for instance, if I want Internet, I HAVE to get it from Verizon. No other provider has "wired" my area, not even cable!

We are rapidly approaching the point where Internet is a necessity. More and more services are moving online and discontinuing their support of traditional avenues. Many employers are requiring Internet access. My friend, who works for Macys, can only get her work schedule, hours, vacation application, from the employee web site. Internet is becoming a necessity, just like electricity has.

Bob
--
"If we believe absurdities, we shall commit atrocities." -- Voltaire

BF69
Premium
join:2004-07-28
Camden, TN
said by baineschile:

Why should the government have to regulate TV and Broadband companies? Neither are a necessity to live (I know there will be arguments about this), but there are tons of people in the USA who dont have a TV or a computer, and do just fine.

If one of these companies step out of line, the consumers will speak with their wallets.
Not if you only have ONE choice.

morbo
Complete Your Transaction

join:2002-01-22
00000
said by baineschile:

If one of these companies step out of line, the consumers will speak with their wallets.
which is the entire problem with a duopoly. only one real alternative and the motivation to compete on any real issue is absent.

see the problem?
moonpuppy

join:2000-08-21
Glen Burnie, MD
said by baineschile:

Why should the government have to regulate TV and Broadband companies? Neither are a necessity to live (I know there will be arguments about this), but there are tons of people in the USA who dont have a TV or a computer, and do just fine.

If one of these companies step out of line, the consumers will speak with their wallets.

If we do want to classify broadband as a utility, it means it will be government owned, thus saturated and unmoving.
Again, what if you have only one choice.

Cable companies used to sign franchise agreements to get EXCLUSIVE rights to an area (usually an entire county.) With those rights comes a bit of responsibility.

Now, those agreements are all but gone and the cable companies now sue to keep others from coming in and some local legislators actually help them out. Should this be allowed?

People would vote with their wallets if they had a choice. In the areas where there is a choice, I can tell you people do vote.
wentlanc
You Can't Fix Dumb..

join:2003-07-30
Maineville, OH
And when consumers vote to allow their municipality, the imcumbent providers sue, and lobby to stop it. Greedy companies are stepping out of line, and customers are reacting to it. Why are you complaining when customers are doing EXACTLY what you are purporting that they will do?!?!

cw
decifal

join:2007-03-10
Bon Aqua, TN
kudos:1
Reviews:
·Verizon Broadban..
said by baineschile:

Why should the government have to regulate TV and Broadband companies? Neither are a necessity to live (I know there will be arguments about this), but there are tons of people in the USA who dont have a TV or a computer, and do just fine.

If one of these companies step out of line, the consumers will speak with their wallets.

If we do want to classify broadband as a utility, it means it will be government owned, thus saturated and unmoving.
Probably the same reason why fuel should be REregulated.. You see where unregulating that in 2000 ( guess who came in that year ). Broadband has become a way of life for many and it continues today.. You might not see it for your own reasons, but the use and need for it is there.. To bad the duo's usually are the main providers, while third party providers are given uphill legal battles at the start just to establish, which is a shame.. It really does look bad on the greatest country in the world, when its technology is soo poorly deployed and over priced that we rank anywhere past position 5 on quality of broadband global wide.... You may not care, but alot of us do..

The flintstone age is gone, the days of the entire family gathering around a mono radio to listen to a cowboy's and indian storys are gone.. Time is now for faster and more wide spread and usuable data options.. You can stay in the shed on the hill grumbling about the past..

Thats okay, remember the past, for if you don't your doomed to repeat it. But just remember to live in the now, for you are already missing it.

KrK
Heavy Artillery For The Little Guy
Premium
join:2000-01-17
Tulsa, OK
said by baineschile:

Why should the government have to regulate TV and Broadband companies?
Several reasons: Lack of sufficient competition, use of public airwaves etc, preventing interference or incompatibility, etc
--
"Fascism should more properly be called corporatism because it is the merger of state and corporate power." -- Benito Mussolini

Go Tarheels
Premium
join:2006-01-05
Nashville, NC
kudos:1

And what do you suggest?

For there to be more competition you have lay your own infrastructure. Or should the gov't lay the infrastructure and run private entities out of business since they won't be able to "adapt".

You offer criticism yet no solution...

espaeth
Digital Plumber
Premium,MVM
join:2001-04-21
Minneapolis, MN
kudos:2
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1 edit

Reasonable request

"We believe consumers need to have notice and consent about what they’re getting. It’s very, very important that these providers tell consumers about the speed they’re getting, and whether (ISPs) are making any types of management decisions in terms of the network that affect consumers."
In contrast to all the crap where "Net Neutrality" is used to describe "Anything I don't like about what my provider is doing," this is actually a reasonable, actionable position.

Matt3
All noise, no signal.
Premium
join:2003-07-20
Jamestown, NC
kudos:12

Re: Reasonable request

said by espaeth:

"We believe consumers need to have notice and consent about what they’re getting. It’s very, very important that these providers tell consumers about the speed they’re getting, and whether (ISPs) are making any types of management decisions in terms of the network that affect consumers."
In contrast to all the crap where "Net Neutrality" is used to describe "Anything I don't like about what my provider is doing," this is actually a reasonable, actionable position.
For once, we are in absolute agreement.
Mr Matt

join:2008-01-29
Eustis, FL
kudos:1
Reviews:
·CenturyLink
·Comcast
·Embarq Now Centu..

2 edits

Remember!

Unfortunately I do not hold out to much hope for reform. The problem is that Corporate America has the most Corrupt Government money can buy.

Remember last week when the dirt bags in the banking industry, paid off via campaign contributions. The Republicans and a few Democrats voted against American Citizens interests, when they voted against the bankruptcy forclosure reform bill.

TamaraB
Question The Current Paradigm
Premium
join:2000-11-08
Da Bronx
Reviews:
·Optimum Online
·Clearwire Wireless

Re: Remember!

said by Mr Matt:

... The problem is that Corporate America has the most Corrupt Government money can buy. ...
What's that called again?

"Fascism should more properly be called corporatism because it is the merger of state and corporate power." -- Benito Mussolini

Bob
--
"If we believe absurdities, we shall commit atrocities." -- Voltaire

Matt3
All noise, no signal.
Premium
join:2003-07-20
Jamestown, NC
kudos:12

1 edit
said by Mr Matt:

Remember last week when the dirt bags in the banking industry, paid off via campaign contributions. Those Democrats voted against American Citizens interests, when they voted against the bankruptcy forclosure reform bill.
The Democrats huh?

»www.truthout.org/050109L

I think you mean the Republicans and a handful of Democrats.

A dozen Democrats joined Republicans in the 45-51 vote to scuttle the bill, which Obama had said was important to saving the economy and promised to push through Congress.

cableties
Premium
join:2005-01-27

Not so fast...

The government can't even enforce itself, let alone take fiscal responsibility.
Look at how much FCC's Kevin Martin was a shill for the telcos and we still pay too much for communications.
The prolonged delays in the digital transition.
Legal wrangling and lobbyists. Oh my!
--
Weeeeeeee!
ShellMMG

join:2009-04-16
Grass Lake, MI

Rural resident raises her hand

I'm rural and I have a few choices:

1) Wildblue. Minimum $70 a month, high latency (which is interfering with more and more websites), $200+ equipment and installation fee and the worst -- the evil, rotten 7.5G FAP.

2) Verizon Wireless. I'm in an area with good coverage and they'd love to have me...but it's still pricey and then there's a 5G cap. No way, Jose.

3) Hughesnet. Same problems as Wildblue with a slightly different FAP. No thanks.

4) Alltel. My current ISP. They're a world better than Wildblue, the mobility is awesome (my daughter thought she'd died and gone to heaven when we drove to Florida from MI and she had internet the entire trip), BUT I could stand to lose the unlimited service when my contract expires in the fall of 2010 and Verizon takes over.

Sprint's coverage is nonexistent and Hell (a few miles to my north) will freeze over before DSL and/or cable comes through. There's a WiMax service just beyond my reach but I've let them know I'd be a customer if they decided to expand.

I understand the limitations of being rural and I'm not asking for super-fast speeds, but I've got two teens and a restrictive cap would kill me. I'd also rather not have to take out a second loan to pay for a monthly service. I wish there was a website where rural residents and towns could let the ISP corps know we DO want high speed internet.

See 7 replies to this post

duder

@rr.com

control what it cost

not what is on it like china the end

INsano

@qwest.net

Whhhha?

"We have a big roll to play"

Roll/role?

SERIOUSLY?

Where in god's name was that quote copied from?

Boo!

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