Reason Magazine - Topics > Telecommunications Policy

Own Your Own Tail

jwalker@reason.com (Jesse Walker) — Thu, 07 Aug 2008 13:30:00 EDT

Intriguing idea of the day:

Last month, construction was completed on a pilot project that ran fiber optic cables to 400 homes in Ottawa. Stringing fiber optic cables isn't a big deal by itself -- Verizon has been running fiber to millions of homes in the US -- but the Ottawa project comes with a twist: rather than providing Internet access for a monthly fee, the company plans to sell the fiber strands outright to individual homeowners.

This isn't how we're used to doing telecommunications infrastructure. Traditionally, a "last mile" copper loop, coax cable, or fiber strand has been owned by an incumbent telephone or cable company, and the customer has paid a monthly fee for telecom services. But, if the Ottawa experiment is a success, that could change.

In the future, it could become commonplace for homes to come with "tails." These customer-owned, fiber-optic connections would link them to a network peering point. Without the expense of rolling out last mile infrastructure to every home, many more ISPs could afford to serve a given neighborhood by running wiring to the peering point, leading to more competition and lower prices. Perhaps best of all, the growth of customer-owned fiber could make debates over "open access" and network neutrality moot, as robust telecom competition should prevent the worst of the monopolistic behavior exhibited by telco and cable incumbents.

For more -- including some of the practical barriers such projects will have to overcome -- go here.

The Central Committee Is in Session

jwalker@reason.com (Jesse Walker) — Thu, 12 Jun 2008 15:00:00 EDT

The Federal Communications Commission (FCC) is holding an open meeting today, giving students of public policy a chance to observe an especially egregious arm of the regulatory state. If you want to see what's wrong with Washington, the FCC is as good a place as any to start looking: Since its birth in 1934, it has manifested three fundamental problems.

The commission is corrupt. I don't just mean the sort of corruption where the chairman loosens his tie, puts his feet up on his desk, and doles out favors to the companies that scratched the right backs—though you'll find plenty of that in the commission's history. Even when the body is being relatively transparent and above-board, it is beholden to politically connected lobbies. The FCC controls an important economic resource. Naturally, important economic interests try their best to influence its decisions.

The most flagrant example of this might be the welcome the commission gave to FM radio. The technology was an enormous leap forward: It allowed stations to broadcast without static, and it allowed more signals to coexist on the spectrum. It also worried RCA, which was investing heavily in the development of television; the company fretted that consumers might not pay for both a new FM radio and a new TV set. RCA didn't control the patent on FM, so it pressured the FCC to favor the other technology. The regulators obliged, and a series of roadblocks appeared in FM's path. The most destructive decision came in 1944, when the commissioners suddenly reassigned the FM broadcasters' portion of the ether to television, instantly rendering every FM receiver obsolete.

Sometimes the benefits of FCC corruption were more narrowly focused. The most infamous illustration might be the case of Lady Bird Johnson, whose broadcasting empire relied on the Washington connections of her husband, future president Lyndon Johnson. The Johnsons got rich off their stations, with the FCC smoothing the way whenever they needed an application approved and throwing up regulatory hurdles when someone threatened their monopoly on Austin's TV market.

Does such winner-picking still go on today? Decide for yourself. The commission intends to auction off some wireless spectrum soon. FCC chief Kevin Martin wants to impose some restrictions on how that spectrum can be used—restrictions that happen to dovetail with the business model of one well-connected startup. The business in question, M2Z, wants to build an ad-supported national broadband network, with additional tiers where consumers can pay extra for speedier connections; last year it asked the commission to grant it the spectrum outright. The regulators refused, and the company promptly sued to overturn the decision. But if the auction goes forward as planned, the commission will have effectively bequeathed the spectrum to the corporation anyway.

You needn't be fond of the incumbent wireless industry—not exactly free-market heroes themselves—to appreciate how inappropriate it is for the government to weigh the scales in any single firm's favor. Those incumbents have protested the plan, leading Martin to take his proposal off the agenda for today's meeting. But that doesn't mean the idea is dead: Martin says he hopes to introduce it next month instead.

Despite this unpleasant history, the FCC believes it is qualified to serve as a moral guardian for the rest of us. Which leads us to problem number two.

The commission is sanctimonious. For seven decades, the nation's scolds and censors have used the FCC as a tool to shape the sounds and images allowed on the airwaves. In 1952, for example, then-commissioner Paul Walker announced with satisfaction that his agency had "surveyed the programming of some of the television stations in operation, and found that some of them had reported no time devoted to broadcasts of a religious nature. We felt in view of this fact that regular renewal of their licenses would not be in the public interest." The stations quickly revised their schedules, and the commission agreed to renew their licenses after all.

These days the FCC is less likely to shoehorn something onto a station's schedule, but it's more than willing to slice something off the program. This practice also has a long history. It was the FCC that enforced Spiro Agnew's crusade against "drug lyrics," an especially vague stricture at a time when some fretful listeners managed to detect traces of narcotics in "Puff the Magic Dragon" and "Hey Jude" (for the phrase "let her under your skin"). Agnew himself believed the Beatles song "With a Little Help from My Friends" was a coded message in which "the 'friends' were assorted drugs with such nicknames as 'Mary Jane,' 'Speed' and 'Benny.'" Rock stations suddenly faced much more uncertainty about what they were allowed to play, and worried program directors reined in their DJs, hastening the decline of freeform radio.

More recently, the FCC under Michael Powell and then Kevin Martin has waged war on "indecent" material, stepping up enforcement even before Janet Jackson's infamous nipple slip in 2004 and ramping its penalties still higher since then. Now Martin wants to tell a company that intends to offer a free national wireless network that it'll have to filter out the porn if it wants access to the ether.

The company? M2Z, of course—or, to be precise, whoever wins the auction tailored to M2Z's business model. Don't expect any objections: The smut-free proviso was already present in M2Z's plans. The execs there understand what Washington wants.

And then there's problem number three:

The commission is technocratic. The next time someone tells you central planning is dead, remind him that there is an arm of the federal government that decides in advance how different chunks of the electromagnetic spectrum will be used, and that it also reserves the right to determine which entities will be allowed to use it. It's true the commission has adopted several market "mechanisms" in the last few decades: FCC-approved broadcasters now have the right to sell their licenses to other FCC-approved broadcasters, and spectrum is usually distributed by auction rather than pure fiat. But even an auction can be bent to the planners' will.

For evidence, look—again!—at the M2Z situation. If the auction goes forward according to Martin's reported plans, the bidding won't be open to just any telecom company. Applicants will have to use that spectrum for a particular sort of service. They will even be pushed to adopt a particular business model. There are phrases to describe such an arrangement. "Free market" is not one of them.

But that is how the Federal Communications Commission works. In theory, its job is to manage the nation's spectrum in the public interest. In practice, inevitably, that means its job is to pick and choose among the definitions of "the public interest" offered by rival industry lobbies and moralistic pressure groups. Corruption, sanctimony, and the conceit of central planning: That's the FCC—and Martin's pet auction—in a nutshell.

Managing Editor Jesse Walker is the author of Rebels on the Air: An Alternative History of Radio in America (NYU Press).

Thursday Morning Links

jwalker@reason.com (Jesse Walker) — Thu, 05 Jun 2008 08:15:00 EDT

* Cato embraces micro radio.

* The Nation discovers the Ron Paul Republicans.

* A socialist reads Hayek.

* Debbie Nathan reads Comstock.

* A child of a commune peers at the children of the FLDS.

Call Me, We'll Do A Free Lunch

kmw@reason.com (Katherine Mangu-Ward) — Mon, 05 May 2008 11:32:00 EDT

The Universal Service Fund is one of those annoying lines on your phone bill that turns your $39.99 plan into at least 50 bucks a month. Essentially it takes taxes on interstate telephone service to subsidize telecom service for poor and rural areas, as well as broadband for libraries, health care facilities, and schools.

Unsurprisingly, payouts to phone companies are raging out of control, yet many rural areas still have notably inferior service:

The cost of the program has skyrocketed because of a bizarre funding formula which the FCC uses: the so-called "identical support rule." The agency calculates subsidies to smaller wireless carriers that serve rural areas based on the support that incumbent carriers receive per line, rather than on the actual costs of the smaller telcos. This has resulted in a dramatic rise in USF payments from $2.6 billion in 2001 to $4.3 billion last year.

Not to rush into anything, but it looks like the FCC may be thinking about maybe considering at some point reforming the system. Most likely this will just mean switching to subsidizing broadband instead of telephones.

Phone Power to the People

jwalker@reason.com (Jesse Walker) — Wed, 16 Apr 2008 10:05:00 EDT

There are, roughly speaking, three broad approaches to Third World development. There are those who would preserve poverty by keeping development itself at a minimum. There are those who would modernize poverty by imposing coercive, centralized systems on indigenous societies. And there are those who want to make more tools available to Third World people themselves, to accept or reject as they see fit, to discover their own uses for the technologies, to adapt them to their own evolving ways of life.

One potential tool for autonomy, resting at the intersection between high tech and the human scale, is the cell phone. Sara Crobett writes in The New York Times:

Something that's mostly a convenience booster for those of us with a full complement of technology at our disposal -- land-lines, Internet connections, TVs, cars -- can be a life-saver to someone with fewer ways to access information. A "just in time" moment afforded by a cellphone looks a lot different to a mother in Uganda who needs to carry a child with malaria three hours to visit the nearest doctor but who would like to know first whether that doctor is even in town. It looks different, too, to the rural Ugandan doctor who, faced with an emergency, is able to request information via text message from a hospital in Kampala.

[Anthropologist] Jan Chipchase and his user-research colleagues at Nokia can rattle off example upon example of the cellphone's ability to increase people's productivity and well-being, mostly because of the simple fact that they can be reached. There's the live-in housekeeper in China who was more or less an indentured servant until she got a cellphone so that new customers could call and book her services. Or the porter who spent his days hanging around outside of department stores and construction sites hoping to be hired to carry other people's loads but now, with a cellphone, can go only where the jobs are. Having a call-back number, Chipchase likes to say, is having a fixed identity point, which, inside of populations that are constantly on the move -- displaced by war, floods, drought or faltering economies -- can be immensely valuable both as a means of keeping in touch with home communities and as a business tool. Over several years, his research team has spoken to rickshaw drivers, prostitutes, shopkeepers, day laborers and farmers, and all of them say more or less the same thing: their income gets a big boost when they have access to a cellphone.

It may sound like corporate jingoism, but this sort of economic promise has also caught the eye of development specialists and business scholars around the world. Robert Jensen, an economics professor at Harvard University, tracked fishermen off the coast of Kerala in southern India, finding that when they invested in cellphones and started using them to call around to prospective buyers before they’d even got their catch to shore, their profits went up by an average of 8 percent while consumer prices in the local marketplace went down by 4 percent. A 2005 London Business School study extrapolated the effect even further, concluding that for every additional 10 mobile phones per 100 people, a country’s G.D.P. rises 0.5 percent.

One unexpected outcome: a burgeoning alternative banking system.

It's also the precursor to a potentially widespread formalized system of mobile banking. Already companies like Wizzit, in South Africa, and GCash, in the Philippines, have started programs that allow customers to use their phones to store cash credits transferred from another phone or purchased through a post office, phone-kiosk operator or other licensed operator. With their phones, they can then make purchases and payments or withdraw cash as needed. [Al] Hammond of the World Resources Institute predicts that mobile banking will bring huge numbers of previously excluded people into the formal economy quickly, simply because the latent demand for such services is so great, especially among the rural poor.

AT&T Works In More Places....

bdoherty@reason.com (Brian Doherty) — Thu, 28 Feb 2008 13:39:00 EST

For some real-world commentary on the recent telecommunications company/FISA brouhaha, see the work of the Billboard Liberation Front on a San Francisco AT & T billboard yesterday.

For more sober and detailed commentary on this matter see, to begin with, Julian Sanchez's "Time for Democrats to Lead on FISA" from December.

Harmful Elements in the Air

jwalker@reason.com (Jesse Walker) — Wed, 20 Feb 2008 09:51:00 EST

Happy news from Hong Kong:

The Hong Kong government's attempt to shut down pirate radio broadcaster Citizen's Radio was scuttled in a recent decision of the Hong Kong High Court. In the decision, the Court stated that it did not see how the station's broadcasting could jeopardize public safety.

In a complicated ongoing legal battle, the Hong Kong government had sought to extend an injunction preventing the station from going to air. Citizen's Radio argued that denial of their application for a license violated their freedom of expression.

The unlicensed broadcasts were started in 2005 by a group of pro-democracy activists after their application for a license was denied by the Broadcasting Authority. The station airs phone-ins and discussions about current events and politics, including discussions about Hong Kong's transition to full democracy.

The Whys of Spies

jsullum@reason.com (Jacob Sullum) — Wed, 06 Feb 2008 07:02:00 EST

Last August, panicked at the prospect of an imminent terrorist attack that could be averted only by granting the executive branch new surveillance powers, Congress passed the Protect America Act. With the law scheduled to expire this month, the Bush administration is trying to scare Congress into making the powers permanent.

The alleged crisis is an artificial one created by a president who waited until last summer to seek congressional approval for the illegal surveillance his administration conducted after 9/11. Bush took his time, and so should Congress.

After The New York Times revealed, in December 2005, that the National Security Agency had been eavesdropping on international communications involving people in the U.S. without the warrants required by the Foreign Intelligence Surveillance Act (FISA), the Bush administration insisted the program was perfectly legal. The Justice Department claimed Congress (apparently without realizing it) had implicitly amended FISA when it authorized the use of military force against Al Qaeda and its Taliban allies in Afghanistan.

At the same time, then-Attorney General Alberto Gonzales said the White House had not asked Congress to change FISA because Congress probably would have said no. That explanation was inconsistent not only with the claim that Congress already had legalized the surveillance program but also with the fact that Congress had amended FISA in other ways by passing the PATRIOT Act in October 2001. If any doubt remained that Congress would have been receptive to the administration's request for further FISA amendments, it was dispelled by the hasty passage of the Protect America Act.

Even at this late date, it's not clear why FISA needs to be amended. The administration said it violated the law for years because it could not conduct the surveillance necessary to prevent terrorist attacks while complying with FISA's warrant requirements. But in January 2007, Gonzales suddenly announced that the irresolvable conflict somehow had been resolved and that all anti-terrorist surveillance thenceforth would be conducted in compliance with FISA.

A few months later, what had been impossible and then briefly possible became impossible again, supposedly because of a secret ruling by the Foreign Intelligence Surveillance Court. Acccording to the administration, a judge on the court interpreted FISA as requiring a warrant for surveillance of foreign-to-foreign communications that happen to pass through U.S. wires.

"International communications are on a wire, so all of a sudden we were in a position because of the wording in the law that we had to have a warrant to do that," Director of National Intelligence Mike McConnell told the El Paso Times in August. "If it were wireless, we would not be required to get a warrant....My argument was that the intelligence community should not be restricted when we are conducting foreign surveillance against a foreigner in a foreign country, just by dint of the fact that it happened to touch a wire."

It's hard to see how a judge could have interpreted FISA this way. But even if one did, the administration has never explained why this decision (which it inexplicably did not appeal) required Congress to authorize warrantless surveillance of communications that not only traverse U.S. wires but involve people in the United States.

Instead the administration has obscured the breadth of the powers granted by the Protect America Act. In the El Paso Times interview, McConnell falsely asserted that the communications at issue are "all foreign to foreign."

The administration has contradicted itself even on the question of how urgently needed the FISA changes are. Last summer they were so crucial to national security that McConnell claimed pausing to debate the issue meant "some Americans are going to die." More recently, Bush has threatened to let these absolutely essential powers lapse by vetoing extension bills that do not meet his specifications.

An administration that cannot tell a consistent story in public about why it needs new extrajudicial surveillance powers cannot be trusted to exercise those powers in secret.

What a Difference Two Weeks Make

jsullum@reason.com (Jacob Sullum) — Wed, 30 Jan 2008 14:02:00 EST

Yesterday the House and Senate both approved a 15-day extension of the Protect America Act, which was scheduled to expire on Friday, to allow time for further debate, mainly about whether to grant retroactive immunity to the telecommunications carriers that assisted the NSA with its illegal surveillance of international communications involving people in the U.S. The White House, after threatening to veto a one-month extension of the law, which amends the Foreign Intelligence Surveillance Act (FISA), has indicated it will go along with the shorter extension. This is the latest in a series of Bush administration reversals and self-contradictions regarding FISA.

After The New York Times revealed the existence of the NSA's warrantless surveillance program in December 2005, the administration said the program was perfectly legal. It also said it had to break the law, and continue breaking it for years, because complying with FISA would have made it impossible to stop terrorist attacks and because Congress would not have agreed to change the law (although it already had done so on more than one occasion). Then, in January 2007, the administration announced that it had found a way to do the impossible: comply with FISA and still conduct the surveillance necessary to fight terrorism. Later that year, it said that what had been impossible and then briefly possible was now impossible again, supposedly because of a secret court ruling finding that FISA requires a warrant to monitor foreign-to-foreign telephone calls and email messages if they happen to pass through U.S. switches, routers, or servers.

Last summer, when the administration asked Congress to fix FISA (something it supposedly had assumed Congress would never do), the bill it demanded not only addressed this technical problem; it also allowed warrantless surveillance of communications between people in the U.S. and people in other countries, as long as the people in foreign countries were said to be the targets. That authority, the administration insisted, was absolutely essential to national security, and even pausing to debate the issue meant that "Americans are going to die." Every day that U.S. intelligence agencies went without this power was a day on which Americans were needlessly exposed to the risk of a catastrophic terrorist attack. Terrified at that prospect (or terrified at being portrayed as insufficiently concerned about that prospect), Congress complied, but it put a six-month limit on the Protect America Act so the issue could be revisited in a less panicky climate.

With the expiration date approaching, the Democrats proposed another temporary extension, but the president said he'd veto any bill that did not make the FISA amendments permanent and add retroactive immunity for the telecommunications companies that had collaborated in the administration's end run around the statute. So even though the administration portrayed Congress as unforgivably reckless for taking time to consider whether the new surveillance powers were necessary and appropriate, Bush was willing to let them lapse just to show how serious he was about protecting us from terrorism. But now he has changed his mind again, seeing the merits of a temporary extension. If the president and his men can't even get their public story about warrantless surveillance straight, how can we trust them to secretly exercise the unilateral powers they are seeking?

Every One of Those [artificially scarce] Late Night Stations/Playing Songs Bringing Tears to My Eyes

bdoherty@reason.com (Brian Doherty) — Thu, 24 Jan 2008 15:17:00 EST

Wondering why radio sucks in its Feburary "Why Things Suck" cover package, Wired reporter Brendan Koerner goes to the expert: our own Jesse Walker. An excerpt:

The sad decline of conventional radio is an Econ 101 lesson in the consequences of artificial scarcity — and a B-school case study on the limits of scientific management. The scarcity is the fault of the Federal Communications Commission, which decided in the mid-1940s to confine FM broadcasting to its current frequency range, roughly between 88 and 108 MHz. The FCC's spectrum-allocation rules, designed to prevent station signals from interfering with one another, further limited the number of broadcasting licenses it granted in any one market.
By the '70s, thanks to a fecund period in popular music, a generation of audacious DJs, and cheap radios, FM had become wildly popular. That made stations valuable properties — so valuable, in fact, that only large companies could afford to buy and manage them. "The legal cost alone of getting on the air is enormous," says Jesse Walker, author of the radio history Rebels on the Air. The government could have eased this situation by allocating more spectrum for radio use and increasing the number of licenses, Walker argues.

And read his Rebels in the Air.

The Minute Standard

jwalker@reason.com (Jesse Walker) — Thu, 17 Jan 2008 15:31:00 EST

A free-market currency of sorts emerges in Kenya's post-electoral wreckage:

Kenyan phone users do not have monthly phone plans; they pay for prepaid credits (like most of the world). Prior to the election, getting credits was easy -- they were available in kiosks, stores, bars, anywhere you could imagine. Yet, these venues all closed shop after the election because of the violence and looting. Credits have become a rare commodity and the price has skyrocketed. Credits have also turned into a currency and people are trading credits for food and medicine. Credits are worth more than the government's currency. Because of difficulties in getting credits to citizens, a service called Pyramid of Peace has popped up to help people send credits to Kenyans.

For more on grassroots activism in Kenya, see this excellent roundup at Global Voices Online.

Bonus link: R.A. Radford's classic account of cigarettes evolving into money in World War II POW camps.

McCain: Losing His Job in the New York Times?

bdoherty@reason.com (Brian Doherty) — Thu, 20 Dec 2007 18:37:00 EST

Sure, he's racking up endorsements hither and yon (sweeping yon authoritatively, according to some polls), but the New York Times is holding something that could hurt (though, as David Weigel spelled out the other day, it's hard to hurt the essentially dead).

Drudge has the pre-skinny:

Republican presidential candidate Sen. John McCain, R-Ariz has been waging a ferocious behind the scenes battle with the NEW YORK TIMES, the DRUDGE REPORT has learned, and has hired DC power lawyer Bob Bennett to mount a bold defense against charges of giving special treatment to a lobbyist! McCain has personally pleaded with NY TIMES editor Bill Keller not to publish the high-impact report involving key telecom legislation before the Senate Commerce Committee.... The paper's Jim Rutenberg has been leading the investigation and is described as beyond frustrated with McCain's aggressive and angry efforts to stop any and all publication. The drama involves a woman lobbyist who may have helped to write key telecom legislation. The woman in question has retained counsel and strongly denies receiving any special treatment from McCain. Rutenberg, along with reporter David Kirkpatrick, has been developing the story for the last 6 weeks. Rutenberg had hoped to break the story before the Christmas holiday, sources reveal, but editor Keller expressed serious reservations about journalism ethics and issuing a damaging story so close to an election.

If this is true, can anyone out there in journalism-ethics land explain to me how Keller deserves anything other than a kick out the door for this attitude?

For all the real story and analysis about McCain you can't find in the New York Times, read Matt Welch's new book McCain: The Myth of a Maverick.

3.3 Billion Cell Phones and Counting

kmw@reason.com (Katherine Mangu-Ward) — Thu, 29 Nov 2007 16:04:00 EST

There will be one cell phone for every two people on Earth, as of some time today.

Somewhere on the planet today someone will skip over pages of fine print they will later regret not reading - and thumb their nose at the risk of a phone exploding - in order to sign a mobile services contract that will bring the worldwide number of such accounts to 3.3 billion, a figure roughly equal to half the Earth's population.

This doesn't mean that half of the people on the planet actually own a phone. In 59 countries there are more accounts than people. But only 10 percent of the world's population remains without cell coverage.

Read about the need for an American cell phone liberation front here.

Read about the FCC's secret cell phone map here.

Or just call your mother.

Via Fark

Sadly Comcastic!

info@reason.com (Jeff Taylor) — Thu, 25 Oct 2007 12:32:00 EDT

Let me make it perfectly clear: I hate Comcast. The years I was sentenced to the company's crappy CATV and broadband service were long, brutal, and demeaning. And that was just the time spent interacting with Comcast customer service.

Still, contrary to much of the recent vilification the company has received, Comcast has a hint of a justification in attempting to "shape traffic" on its network by throttling bandwidth hogs. More importantly, Comcast's misdeeds do not necessitate—as many have assumed—some sort of federal solution and associated broadband policing.

First, Comcast was absolutely wrong not to inform its customers that file-sharing apps like BitTorrent would be disrupted by active Comcast intervention. That is a deceptive business practice, plain and simple. However, there are still sound reasons for the traffic shaping goal—which the AP hysterically labeled "data discrimination"—that require no ill-intent to explain.

Any network—roads, broadband, canals—has peak usage times. The provider of that network wants to maximize the number of customers they can charge to use that network, of course. But you cannot attract customers unless you promise some reliable level of service and try to smooth out usage peaks and valleys.

Applied to the world of Comcast, who are often trying to service many customers through one access point, one or two BitTorrent or Gnutella freaks can eat away at the access promised to other customers. Comcast would have to be suicidal not to take note of this fact and try to address it.

This is not "data discrimination," but common sense. Likewise it is common sense that consumers would not actually benefit by turning broadband access into a quasi-public utility via a declaration that Internet service is a common carrier, with absolutely no differentiation in the traffic carried, and answerable only to regulators on that count.

Think about the kind of consumers we want to be—captive or coveted? In the old telco common carrier model, consumers had no choice in provider, and only scant choice for services. Maybe a choice of Bakelite handset color if they were lucky. Contrast that with today's hypercompetitive cell phone market, where consumers are courted by providers with hundreds, if not thousands, of options to reflect a user's needs.

This brings us to the major confusion with data discrimination/Net neutrality thinking: Bits may be bits, but users are not users. We should not mistake the binary, on-off nature of digital communication for the end result, which is the untold number of different ways that this means of communication can be used.

Old dial-tone voice service did only one thing, so it was fairly easy for regulators to handle. You either were able to make and receive calls, or you were not. Then the government decided that long distance calls should subsidize local service, and that was that. You heard a dial tone when you picked up your receiver, and that was your expectation as a consumer of telephone service.

A broadband consumer expects—what, exactly? Low-latency for gamers. Reliability for businesses and home offices. Upstream vs. downstream—which is most important to you? Downstream for most folks, but not all. Not someone trying to push a 15 megabyte Power Point presentation through 48K. Is voiceover IP a priority for you? IP TV?

A federal "Civil Rights Act" for Internet bits couldn't possibly address all of these competing uses for broadband service.

In fact, the best solution to providing competition and making broadband consumers coveted by providers does not lie in federal legislation; it is found in breaking the monopoly service providers like Comcast have with local governments. If we are really worried that consumer data will be discriminated against, then the best response is to ensure that consumers have multiple choices in local service providers.

Failing that, local governments can and should negotiate levels of service requirements into their franchising agreements with providers like Comcast. Such requirements have long been a part of cable TV franchise agreements, and explain why Comcast or Time Warner will roll a truck for reports of snow on your basic cable tier. But report flaky Net service? If you're lucky, they'll drop off a new modem in a day or two.

Robust and reasonable Internet service requirements would at least start to ensure that providers could not blame shoddy network performance on peer-to-peer users, or go on a witchhunt against them in order to avoid spending money on needed network upgrades. At a minimum, every franchise agreement should have some minimum up-time and advertised speed language.

Would that usher in Net utopia? No, but it would help ensure consumers get what they pay for without engaging the regulatory blunderbuss of Congress. And it would leave time for the truly important things in life.

Like hating Comcast.

Reason contributor Jeff Taylor writes from North Carolina.

Breaking the Law in the Name of the "War on Terror" = Not Breaking The Law

bdoherty@reason.com (Brian Doherty) — Thu, 20 Sep 2007 19:04:00 EDT

Bush calls for vital action to protect the American Way of Life:

President Bush plunged directly into the campaign to save his warrantless wiretapping program, arguing Wednesday that telecommunications firms that cooperated with spy agencies should be granted retroactive immunity from possible prosecution.
............
"The need for action is clear," Bush said. "Unless the reforms in the act are made permanent, our national security professionals will lose critical tools they need to protect our country."

Bush argued that telecommunications companies that provided data to the government under the program should be granted immunity from prosecution in the event that their actions are determined to have been illegal.
...........

"It's particularly important for Congress to provide meaningful liability protection to those companies now facing multibillion-dollar lawsuits only because they are believed to have assisted in efforts to defend our nation following the 9/11 attacks," Bush said.

Full story from LA Times.

Jacob Sullum from last month on this topic of Bush and the telecom companies putting their lives on the line to wiretap their customers, in which he observed:

the administration....feels duty-bound to withhold information when it might be useful to critics who oppose President Bush's anti-terrorism policies, since those policies are necessary to protect national security. But the very same information can—indeed, should—be released at a more opportune time, when it will help the president pursue his policies.

Seedy Gonzales

jblanks@reason.com (Jonathan Blanks) — Tue, 10 Jul 2007 12:36:00 EDT

Today's Washington Post asserts that Attorney General Alberto Gonzales knew about numerous FBI surveillance violations prior to Inspector General Glenn Fine's report on FBI abuses to Congress in March. Coincidentally, Gonzales decided not to tell Congress about them when the PATRIOT Act was up for renewal:

As he sought to renew the USA Patriot Act two years ago, Attorney General Alberto R. Gonzales assured lawmakers that the FBI had not abused its potent new terrorism-fighting powers. "There has not been one verified case of civil liberties abuse," Gonzales told senators on April 27, 2005.

Yet in his first weeks on the job, Gonzales' office was made aware of several instances that did not jive with that pesky document known as the Constitution:

Two of the earliest reports sent to Gonzales, during his first month on the job, in February 2005, involved the FBI's surveillance and search powers. In one case, the bureau reported a violation involving an "unconsented physical search" in a counterintelligence case. The details were redacted in the released memo, but it cited violations of safeguards "that shall protect constitutional and other legal rights." The second violation involved electronic surveillance on phone lines that was reinitiated after the expiration deadline set by a court in a counterterrorism case.

The report sent to Gonzales on April 21, 2005, concerned a violation of the rules governing NSLs, which allow agents in counterterrorism and counterintelligence investigations to secretly gather Americans' phone, bank and Internet records without a court order or a grand jury subpoena. In the report -- also heavily redacted before being released -- the FBI said its agents had received a compact disc containing information they did not request. It was viewed before being sealed in an envelope.

Gonzales received another report of an NSL-related violation a few weeks later. "A national security letter . . . contained an incorrect phone number" that resulted in agents collecting phone information that "belonged to a different U.S. person" than the suspect under investigation, stated a letter copied to the attorney general on May 6, 2005.

Well, the FBI can't be held accountable if businesses are too cooperative and give up too much information, can they? You know they'd at least report the oversight:

Some of the reports describe rules violations that the FBI decided not to report to the intelligence board. In February 2006, for example, FBI officials wrote that agents sent a person's phone records, which they had obtained from a provider under a national security letter, to an outside party. The mistake was blamed on "an error in the mail handling." When the third party sent the material back, the bureau decided not to report the mistake as a violation.

Ok, but the FBI would completely discard the information they didn't request, right?:

The memos also detail instances in which the FBI wrote out new NSLs to cover evidence that had been mistakenly collected. In a June 30, 2006, e-mail, for instance, an FBI supervisor asked an agent who had "overcollected" evidence under a national security letter to forward his original request to lawyers. "We would like to check the specific language to see if there is anything in the body that would cover the extra material they gave," the supervisor wrote.

But Gonzales had no idea this stuff was going on:

At least two other reports of NSL-related violations were sent to Gonzales, according to the new documents. In letters copied to him on Dec. 11, 2006, and Feb. 26, 2007, the FBI reported to the oversight board that agents had requested and obtained phone data on the wrong people.

Nonetheless, Gonzales reacted with surprise when the Justice Department inspector general reported this March that there were pervasive problems with the FBI's handling of NSLs and another investigative tool known as an exigent circumstances letter.

Either Gonzales lied to Congress or he is the most incompetent department head in Washington, and that's saying a lot.

More from reason on National Security Letters here and here. More on Gonzo here.

The Accidental Modernist

jwalker@reason.com (Jesse Walker) — Wed, 16 May 2007 06:43:00 EDT

One of the great jokes of Jerry Falwell's career was that the TV program that made his name was called The Old Time Gospel Hour. Was there really anything old-time about that show? Television itself was young when the series debuted, and even the radio preachers had been around for only a few decades; the idea that you might get some or all of your weekly dose of the Lord from an electric picture-box was a fairly radical idea. To many old-time devotees of the gospel, TV itself was a suspicious export from the secular world, best kept outside the home. As far as they were concerned, the revelation would not be televised.

Not so for Falwell, who died May 15 at age 73. He and his fellow televangelists overturned those old assumptions, and in the process radically transformed American media, American politics, and American religion. Like so many alleged reactionaries, they actually functioned as fierce modernizers, turning isolated, apolitical, denominationally diverse religious communities into a national and increasingly ecumenical political movement. Like earlier generations of conservative Christians, Falwell's audience was alienated from the modern world, especially the government and the mass media. Unlike those earlier generations, Falwell's audience dealt with this alienation by plunging headfirst into the modern world, including the government and the mass media.

That shift required intervention from above, in this case from the FCC. The Federal Communications Commission had long required TV stations to devote a certain number of hours a week to public service programming. In 1960 it ruled this requirement could be met with paid religious programs. Falwell, Pat Robertson, and other TV preachers rushed to fill the Sunday-morning void, buying time that had previously been donated to more mainline churches that tended to eschew commercialism. As cable and satellite TV emerged, they moved into those new channels as well, building new media networks right under the nose of the mainstream press, which barely noticed the change until the preachers started having a political impact in the late '70s. In 1979, the fugitive yippie Abbie Hoffman stopped by Pat Robertson's headquarters in Virginia Beach and watched as a show was taped. He wrote afterwards that he "was sure I had just witnessed the counterrevolution to the sixties. They, like us, were armed with a cultural-political program and knew how to mix the two effectively. They had mastered television and modern organizing techniques. Unlike us, they had millions of dollars behind them." Over the course of the '70s, the historian Frances FitzGerald notes in her 1986 book Cities on a Hill, "the annual expenditure of TV ministries for airtime went from around $50 million to $600 million; by the end of the decade, there were thirty religiously oriented TV stations, more than a thousand religious radio stations, and four religious networks—all of them supported by audience contributions."

The programs on those stations were an odd mix of the old and the new, like someone had crossed an Elmer Gantry tent revival with the Johnny Carson show. Ecstatic spiritual outbursts rubbed elbows with jovial celebrity interviews; angry political rants mixed with constant pleas for the viewer's money. (For the benefit of my liberal readers: The latter resembled a PBS pledge drive, except you didn't collect your tote bag until you died.) Falwell ran one of the quieter shows. It would almost merit the "old time" label in its title, if it wasn't being broadcast over a strange new medium, if it wasn't using that medium to build a strange new sort of a congregation, and if it wasn't using that congregation to flex Falwell's political power.

At the beginning of his career, Falwell shunned politics. "As far as the relationship of the church to the world," he said in a 1965 sermon, "it can be expressed as simply as the three words which Paul gave to Timothy—'Preach the Word.' We have a message of redeeming grace through a crucified and risen Lord. This message is designed to go right to the heart of man and there meet his deep spiritual need. Nowhere are we commissioned to reform the externals. We are not told to wage wars against bootleggers, liquor stores, gamblers, murderers, prostitutes, racketeers, prejudiced persons or institutions, or any other existing evil as such. Our ministry is not reformation but transformation."

It's easy to read this as nothing more than Falwell's excuse for opposing the civil rights movement—notice the phrase "prejudiced persons or institutions"—and it's easy as well to be alarmed at the thought that even the apolitical Falwell could casually lump murderers and gamblers together, as though running numbers sat on the same moral plane as running a knife through someone's chest. By 1980, at any rate, he was calling his old sermon "false prophecy" and urging his fans to give their money and votes to the conservative wing of the Republican Party. Not just the culturally conservative wing, but the faction that favored the arms race, dumping the Panama Canal Treaty, and siding stridently with Israel.

Fundamentalists had once been one of the American subcultures least likely to register, let alone vote. Now they were participating in primaries and caucuses, taking over school boards and local party groups, and establishing themselves as political players. In the process, they were making common cause with people they would have rejected as demonic just a generation earlier.

At the Scopes trial of 1925, William Jennings Bryan, astutely aware that the fundamentalist/liberal divide might transcend the old divisions between Protestants and Rome, invited a prominent Catholic and a prominent Jew to join the prosecution team. In Summer for the Gods, his Pulitzer-winning account of the trial, the historian Edward Larson quotes the local anti-evolutionists' reply: "We some what doubt the advisability of having a Jew on the case." Nor did they think it wise to include a Catholic.

Fifty years later, by contrast, Falwell and the New Right would throw their support behind Phyllis Schlafly's crusade against the Equal Rights Amendment. Schlafly is a Roman Catholic. "It was very funny at our Eagle Forums," Schlafly would tell Richard Viguerie and David Franke in their 2004 book America's Right Turn. "These people had never been in the same room before, and I'd say, 'Now, the person sitting next to you might not be 'saved,' but we're all going to work together to stop ERA.' Getting the Baptists and the Catholics to work together, and getting them all to work with the Mormons—this was something!" Ecumenicism is supposed to be a bete noir of the Christian right. But in practice, the tent Falwell and his colleagues built has been big enough to include not just conservative Catholics, Protestants, and sometimes Mormons, but even Jews. (Who does Michael Medved have more in common with, Pat Robertson or Harvey Weinstein?) It even seemed to be opening, just a crack, to allow some Muslims into the coalition, before 9/11 slammed that particular door shut.

That wasn't the only effect 9/11 had on Falwell's ministry. Right after the attacks, he infamously suggested that it was "the pagans, and the abortionists, and the feminists, and the gays and the lesbians who are actively trying to make that an alternative lifestyle, the ACLU, People for the American Way, all of them who have tried to secularize America" who "helped this happen." He later apologized, but the remarks still alienated much of the public, Christians included. Not long afterward, another product of the movement he'd helped to build—Ralph Reed, the former executive director of Pat Robertson's Christian Coalition—was caught in a political scandal, using his influence to manipulate conservative activists on behalf of corrupt gambling interests. While Falwell trumpeted an increasingly cracked political message (in 2004 he wrote a column for WorldNetDaily headlined "God is pro-war"), other Christians were reconsidering the virtues of the old approach, of shunning politics and withdrawing as much as possible from the sinful American mainstream. The same alternative media that allowed Christians to make their mark on politics (or, perhaps more accurately, to let politics leave its mark on them) also made it easier to build a parallel pop culture that somehow both resembles and rejects the mainstream.

Falwell fulminated til the end against homosexuality, feminism, and the other alleged evils of modernity. But it's hard to escape the impression that his cohort not only lost the culture war, but perhaps did more than anyone else to usher Hollywood's America into Christian homes. In the early days, Pat Robertson's Christian Broadcasting Network refused to air reruns of Bewitched on the grounds that it promoted witchcraft. Today the outlet is owned by ABC, which calls it the ABC Family Channel and happily broadcasts not just The 700 Club but Sabrina, the Teenage Witch, not to mention the frequently ribald humor of Whose Line Is It Anyway? As intensely intolerant as Falwell could be, it's harder than ever to imagine America reembracing his views about gender relations or the sinfulness of homosexuality. The one cultural war he may have won, perhaps without even meaning to wage it, was the battle against Protestant hatred of the Roman Catholic Church. Despite his illiberal platform and rhetoric, Falwell's long-term legacy might be one of tolerance.

That could depend, of course, on whether the centralized, politicized fundamentalist community he helped create survives the next media revolution. Television tends to smooth over our differences; the Internet allows diversity to bloom. The next Jerry Falwell might be sitting in a church basement right now, pointing a camcorder at himself and preparing to upload his homilies to YouTube. He might even call his little films The Old Time Gospel Minute. Don't let the title fool you.

Jesse Walker is reason's managing editor.

Discuss this article online.

Benign Cells?

rbailey@reason.com (Ronald Bailey) — Thu, 01 Mar 2007 10:45:00 EST

In 1993 David Reynard declared on Larry King Live that a cell phone had caused his wife’s fatal brain cancer and that he was suing for damages. He lost the case due to a lack of scientific evidence for his claim, but his TV appearance set off a wave of suits making similar allegations. Four huge class actions against the leading cellular phone companies are still wending their ways through the courts.

Trial lawyers compare the mobile phone companies to the tobacco industry and claim they’re guilty of an elaborate cancer cover-up. That conspiracy theory might finally be quashed by a huge study reported in the December Journal of the National Institute of Cancer.

The researchers followed 420,095 Danish mobile telephone users for up to 21 years, looking for brain, salivary gland, or eye cancers and leukemia. During that time, the group had 14,249 cancers, which translates into a rate slightly lower than Denmark’s expected rate for the general population.

“We found no evidence for an association between tumor risk and cellular telephone use among either short-term or long-term users,” the researchers conclude. That’s good news for the world’s 2.1 billion mobile phone subscribers and bad news for trial lawyers.

FCC Off

jwalker@reason.com (Jesse Walker) — Fri, 19 Jan 2007 13:58:00 EST

Jack Shafer gives a concise summary of the case for scrapping the Federal Communications Commission.

Stop Me Before I Regulate Again!

rbalko@reason.com (Radley Balko) — Thu, 04 Jan 2007 08:14:00 EST

In the latest issue of Wired, always-interesting Lawrence Lessig admits he was wrong about Microsoft:

I was one of those reluctant regulators. As the evidence of Microsoft's practices became clear, I remember well thinking, "Of course the government needs to do something." And I remember very well the universal impatience with the notion that the market would solve the problem. How could it, when any other company was likely to behave just as Microsoft did?
We pro-regulators were making an assumption that history has shown to be completely false: That something as complex as an OS has to be built by a commercial entity. Only crazies imagined that volunteers outside the control of a corporation could successfully create a system over which no one had exclusive command. We knew those crazies. They worked on something called Linux.
I wanted to believe that Linux would prevail. But I'm a lawyer, and lawyers aren't programmed to see how profitable innovation might happen without commercial control. I didn't like the idea of regulation; I just didn't see any alternative. The suits would always beat the rebels. Isn't that why they were so rich?

The success of Linux and Firefox's bite into IE's market share shows how even a seemingly invincible Godzilla like Microsoft is susceptible to competition if it lets its market dominance breed cockiness and complacency.

Lessig applies this lesson to the "net neutrality" debate, but only to admit he has failed to learn it. He calls himself a "reluctant regulator" on neutrality, though he concedes that he may be making the same mistake there that he made with Microsoft.

Jesse Walker interviewed Lessig for reason in June 2002. And Joseph Bast and Dave Kopel blasted the Microsoft antitrust case in November 2001.

Neutering the Net

gillespie@reason.com (Nick Gillespie) — Thu, 22 Jun 2006 00:00:00 EDT

Is there any debate that gets things more fundamentally ass-backwards than the current battle over "net neutrality"? The sort of preemptive regulation at the heart of proposed legislation rarely works out well, especially in fields where technological change is the rule and not the exception.

Proponents of net neutrality argue that the telecom and cable companies who effectively control access to the Internet should be forced to make sure that all traffic be delivered at the same rate of speed. Due to Federal Communications Commission rule changes made last year, these companies are in a position to charge for "tiered service"—to charge content and application providers money if those providers want to make sure their Web pages and info streams get to surfers first and faster than content from providers who don't pony up. The House of Representatives has already passed a bill that includes net neutrality provisions and failure-to-comply fines and the Senate is slated to consider the matter today sometime. (Full disclosure: Reason Foundation, the nonprofit that publishes Reason Online, receives support from companies and individuals on both sides of this issue.)

"The future of the Internet is at stake," avers no less a cyber-celebrity than Vint Cerf, one of "the fathers of the Internet" and an advocate for net neutrality. If ISPs are allowed to charge some bandwidth users more than others, goes this line of thinking, the virtual marketplace of ideas will eventually devolve into...well, something like broadcast TV, a medium that has never suffered from too little regulation. Yet that most disturbing outcome imagined by net neutrality advocates isn't particularly scarifying or convincing. Consider this recent New Republic house editorial, which presents a very representative argument in favor of net neutrality. Subtitled "The Bush administration prepares to wreck the Internet," the piece conjures up the following dread scenario:

Imagine you were choosing whether to buy a book from Amazon.com or Barnes and Noble's website, and you knew that Amazon's site would load much faster, allowing you to scan books and sample their content much more easily. Or imagine that Fox.com's streaming video came up instantly and CNN.com's balked. Or that whitehouse.gov loaded quickly while the site of a contentious political magazine was plagued by delays.

Forget for the moment that ISPs haven't kicked in tiered service yet, so there's no real telling what form(s) it might take. As Julian Sanchez noted at Reason Online back in April, the fears of net neutrality boosters—an entertainingly broad coalition ranging from high-tech behemoths such as Google and Microsoft and Amazon to political groups such as MoveOn and the Christian Coalition—revolve so far around a phantom menace. "It's true...that ISPs could misuse their control of the onramps to the Internet in a shortsighted attempt to extract monopoly rents, rather than benefit consumers," wrote Sanchez. "That's not a reason for preemptive regulation; it's a reason to see what happens... Hasty regulation that responds to hypothetical abuses may also prevent us from discovering benefits we haven't yet hypothesized."

Let's assume that The New Republic's worst fear of a fast-loading foxnews.com page comes true, even for those of us who prefer other, even more fair-and-balanced, less-comical news sources such as, say, The Onion. What are you likely to do in such a situation? Lump it or leave the company that delivers your broadband (as The Washington Post has reported, more than 60 percent of U.S. ZIP codes are served by four or more high-speed providers, a figure that will only continue to increase)? At the very least, you'll bitch and moan to your provider, which is known to have some beneficial effects, even with near-monopolists. Remember what happened to the biggest ISP of them all, AOL, during its rise to dominance a decade or more ago? Originally a closed system, it had to allow its users to email with non-AOL customers, then it had to allow its customers full access to the Internet, then it had to go to flat-rate pricing, then it had to woo subscribers with ever-increasing free hours, giveaways, and the like. AOL still regularly upgrades its system and its services not because it wants to, but because it has to.

Such capitulations to customers are the rule and not the exception among market leaders, whether you're talking about cyberspace or fast food. As Ohio State University political science professor and Capitalism, Democracy & Ralph's Pretty Good Grocery author John Mueller notes, even monopolists have reasons to court a captive market. If they do so, he explains, they're "more likely to be able to slide price boosts past a wary public—that is, such moves are less likely to inspire angered customers to use less of the product and/or to engender embittered protest to governmental agencies."

The argument that ISPs will degrade a good chunk of their service is speculative beyond belief and a short peg on which to hang overarching regulation. But there's also a strong dose of self-serving dudgeon in the attacks on the telecoms and cable companies that's annoying. It's self-evident why firms that are mostly in the content business—Google, Amazon, eBay, Microsoft—don't want to have pay anything extra. But does it follow that, as The New Republic concludes, "Allowing companies to levy a toll on information providers is not just a blow to consumer choice—it's a blow to democracy?"

If it does, then I'm left wondering how The New Republic—an information provider of sorts—can stomach charging folks between $29.95 and $39.97 for full access to its web site. Does that constitute a "toll" that should be struck down in the interests of democracy and the marketplace of ideas? Or is it a fairly straightforward transaction that, among other things, provides the magazine revenue that it uses to improve and market its product? Isn't there every reason to believe that cable companies and telecoms would similarly use whatever revenues they generate via tiered services to develop the next big thing in terms of networked communications? And isn't there also reason to believe that some of the cable companies and telecoms might not go the tiered-service route, just as some political commentary magazines—including this one—offer free online access to their material?

In any case, it's worth remembering that the Net—most obviously in the form of the World Wide Web—has in large part become a mass phenomenon not in spite of but because of the profit motive. That's easy to forget in a world in which faster and cheaper broadband, user-friendly interfaces, and e-commerce are no longer considered exotic or risky—or an affront to the rigorously non-commercial ethos that, as Wendy Grossman pointed out in her useful 1998 book net.wars, ruled the earlier days of the Net.

You don't have to believe that the cable companies and telecoms are kind-hearted altruists to realize they are desperate to get an edge on their competitors. That very desperation is likely to drive innovation that will benefit end users especially. As Red Herring noted a few months ago, not only did home broadband usage jump 28 percent between 2005 and 2006, the cost of a high-speed connection is going down. "At this point," an analyst at Nielsen/Netratings told the tech mag, "broadband is, if not comparable, at least fairly similar to dialup prices." As The Washington Post—whose parent corporation is both an ISP and a content provider—put it in a June 12 editorial that tracks closely to Sanchez's earlier Reason Online argument:

Allowing builders of Internet infrastructure to recoup their investment by charging the Googles and Amazons for use of their network would balance the incentives for innovation more closely. Ironically, a non-neutral net would accelerate the spread of zippy broadband that can deliver movies, allowing hobbyists with camcorders to take on Hollywood studios. The neutrality advocates who criticize corporatized cable TV should welcome that.

That, too, is speculation, of course. But it seems to me a far more likely outcome than an Internet pipe-provider turning out the lights on CNN while pushing Fox News in your face. "Congress should stay out of cyberspace," counsels the Post. The government "should not burden the Internet with preemptive regulation." In any case, if you do nothing it will be a lot easier to revisit the problem later than it will be if you implement an expansive regulation such as net neutrality.

I Want My IPTV

info@reason.com (Andy Glass) — Thu, 04 May 2006 13:09:00 EDT

In 1994, as the Internet began to evolve, I wrote an article for a Harvard political-science quarterly claiming that it would someday allow anyone with a fast link to the network to become a broadcaster without applying for a license. Then people could look at and talk to other people and share their pictures, music and even movies with anyone else in the world with a similar fast link. The Harvard editors were skeptical. Still, they allowed my assertions to stand.

As we know, it took another decade or so for broadband services to take root in a wide swath of the planet. As an Internet pioneer, the United States led the way. That is why, to this day, the U.S. Commerce Department retains ultimate supervisory control over the addressing system that enables online connections to move smoothly all over the world.

If today Internet-protocol television (IPTV) is a technological reality, then why aren't millions of Americans watching high-def movies on demand or viewing live concerts and sports events via their home wireless networks with user-controllable multiple camera angles on their screens? Why aren't more blog-minded citizens turning their homes into mini-broadcast studios?

The reason is that U.S. government policies and private corporate decisionmaking have fallen well behind the technological curve. We are paying a stiff social, economic and cultural price for our collective folly.

The International Telecommunications Union (ITU) reports that the United States has fallen to 16th place among the nations of the world in broadband usage and continues to plummet. In terms of costs to consumers and the quality of services available to them, the wealthiest country on the planet ranks as a stagnant online backwater compared to the likes of South Korea, Japan, Singapore, Sweden and even Slovenia.

In the 1990s, the "Baby Bell" regional telephone companies persuaded Congress to enact sweeping deregulation. In return, they said, they would utilize their newfound freedom (and profits) to roll out exciting new services, including high-speed fiber-optic lines, so-called universal fat pipes, directly into tens of millions of U.S. homes.

In fact, however, capital expenditures fell from 24 percent of the Bells' total expenses in the early 1980s to merely 14 percent of expenses in 2004. Rather than deploying fiber-optic services (FiOS) into homes, they spent the money to fund technologically obsolete digital-subscriber lines (DSL) while trying to fend off the inevitable shift of long-distance services to a cheap (or even free) Internet telephone platform, known as VoIP, or voice over Internet protocol.

Dial-up services through regular telephone lines typically run at speeds of 50 kilobips per second (Kbps). DSL services commonly download data at speeds of 768 Kbps. Cable modems, which are usually faster, can top out at about 5,000 Kpbs. Meanwhile, large swaths of Western Europe and Asia glide along the Net at 30,000 to 100,000 Kbps. This readily enables them to deploy IPTV, VoIP and other nifty services, offered at reasonable connection fees. By contrast, U.S. consumers struggle in the slow lane and pay hefty usage fees for the privilege.

Sen. Max Baucus, (D-Mont.), the ranking member on the Senate Finance Committee, says, "A second-rate communications infrastructure will slow American innovation, and so will unwise regulations and unnecessary costs. Since innovation is at the heart of America's economic competitiveness, we need to pave the way with sound [new] telecom law."

Turn on your technologically hobbled computers and TV sets to see if the lawmakers are up to this challenge.

Breaking the Levy

khowley@reason.com (Kerry Howley) — Sat, 01 Apr 2006 00:00:00 EST

In December a Washington, D.C., federal appeals court decided that a 3 percent federal excise tax on cell phone usage is illegal. It wasn't exactly a maverick ruling: The court joined eight other federal courts that have ruled the same way. The feds thus owe taxpayers $9 billion—three years' worth of unlawfully collected funds. Yet far from doling out refunds, the federal government has not even stopped collecting the tax.

The tax legally applies only to calls priced on distance, not the length of the conversation, a restriction that should exempt most Internet phone service and cellular calls. Yet the feds will continue to collect the levy on calls the D.C. court determined are legally exempt until the Bush administration decides whether to appeal the ruling. Consumers may eventually be eligible for a slice of the $9 billion overcharge. USA Today estimates that asking for your $49.52 would take seven hours of collecting bills and filling out paperwork.

Legal issues aside, the phone tax has been stirring up controversy since well before the Internet made call distance irrelevant. Dreamt up in 1898 to help fund the Spanish-American War, the tax was repealed in 1902 and reintroduced during World War I. Hang Up On War!, a national campaign to resist the phone tax, has been instructing protesters to duck the "war tax" since Vietnam.

Hang Up On War! suggests that consumers refuse to pay the tax by deducting 3 percent from their monthly bills. Phone companies, accustomed to three decades of tax dissent, tend to have forms and procedures for dealing with consumers who object to the fee. The official policy of Cingular Wireless details the cost of refusing to pay an illegal tax; the company, a 2005 policy document says, must "report to the IRS any customers who refuse to pay."

Couch Potato Subsidies

jsanchez@reason.com (Julian Sanchez) — Wed, 01 Feb 2006 00:00:00 EST

The first duty of government is to secure our fundamental rights. No doubt that is why the Senate agreed in November to spend up to $3 billion retrofitting old television sets to guarantee that every man, woman, and child in these United States would be able to enjoy high-quality digital broadcasts of Desperate Housewives.

Sen. John Ensign (R-Nev.) had initially proposed an amendment limiting the subsidy to a paltry $1 billion, but a spokesman later told the Associated Press that the senator had decided to withdraw it, on the grounds that money saved would just be spent on other projects. The cash will buy converter boxes for sets that would otherwise stop receiving signals in early 2009, when night falls on the age of analog broadcast TV.

That year is the deadline for broadcasters to complete the transition to digital television--a task that requires them to give at least $10 billion worth of analog frequencies to the government. Don't worry that they've lost out on the deal: The digital spectrum Congress gave them in exchange, way back in 1996, was then valued at $70 billion.

In a country where some 85 percent of TV-owning households already travel to the vast wasteland over cable or satellite, why has the government spent almost two decades steering highly valuable spectral real estate to such an inefficient use? Thomas W. Hazlett, who served as chief economist at the Federal Communications Commission in the early '90s, calls over-the-air TV broadcasts "a vestigial organ that is massively costly to the country not to be using for things like mobile phones and wireless Internet." Under a system of genuine property rights in spectrum, he suggests, broadcast frequencies would be sold off for those more valuable uses.�

Broadband Battle

jsanchez@reason.com (Julian Sanchez) — Sun, 01 May 2005 00:00:00 EDT

If a cable company provides high-speed Internet access, is it offering a "telecommunications service" or an "information service"? The future of broadband could turn on how the Supreme Court answers that question.

"Telecommunications services," such as phone companies, are subject to "open access" rules requiring them to make their facilities available to competitors. Hoping to encourage cable companies to invest in broadband, the Federal Communications Commission decided in 2002 to classify cable Internet as a relatively unregulated "information service."

But in what outgoing FCC Chairman Michael Powell has called "the scariest and worst decision that exists on the books today for the future of the Internet," the U.S. Court of Appeals for the 9th Circuit overruled the regulatory body in Brand X Internet Services v. FCC. The Supreme Court agreed in December to hear an appeal by the National Cable & Telecommunications Association, with oral arguments slated for late March.

The passions of partisans on both sides of this debate are stoked by deep disagreements over the preconditions for competition and free speech. Mark Cooper of the Consumer Federation of America, one of the petitioners, argues that the open access principle is "deeply embedded in the DNA of capitalism," noting that "the existence of competition never excused the obligation for common carriage in other areas--telephone, telegraph, steamship, railroad."

But the Manhattan Institute's Thomas W. Hazlett, formerly chief economist at the FCC, believes consumers are best served by "real competition, not government-sponsored Potemkin competition." According to Hazlett, "we've already had a real-world test of which policy works best, and the market test has been won by cable companies; they've been much more aggressive in their investments." A 2004 FCC report shows that the share of high-speed lines provided by cable rose from 56 percent to more than 75 percent between 2001 and 2003.

Opponents of unregulated broadband also worry that cable companies will leverage their control over Internet infrastructure to control content. A brief in the original Brand X case from the American Civil Liberties Union echoed that argument. But Hazlett argues that, as with bookstores, "competition will drive as much openness as consumers are willing to pay for, and so far it seems like they want a lot."�