cj#435> Craig Johnson: CONGRESS STRAIT-JACKETS THE NET

1996-01-23

Richard Moore

The following article was written by Craig Johnson, one of the co-leaders
of cyber-rights, and it provides an excellent summary of the status and
implications of the Telecom Reform Act, which threatens the continued
existence of Internet as we know it, and more generally threatens to
tighten the hold of the corporate elite over public discourse as the cyber
future unfolds.

I felt this piece would be of interest to the cyberjournal and
cyberspace-society members.

-rkm


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NEWS ANALYSIS:  TELECOM REFORM
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by Craig A. Johnson
American Reporter Correspondent
Washington, D.C.
1/22/95

                       CONGRESS STRAIT-JACKETS THE NET
                              by Craig A. Johnson
                       American Reporter Correspondent

        WASHINGTON -- Chief House and Senate telecom conference
negotiators are set to squeeze the Internet into yet another a regulatory
rathole.
        Conference leaders are attempting to attach further
"de-regulatory" restrictions to the conference committee's draft telecom
bill that will remove guarantees for access and interconnection, and
permit telecom companies to price Net services in ways which seem
defensible only to the special interests which crafted the provisions.
        Fresh from the "indecency" defeat, Net lobbyists and public
interest groups barely caught their breath before a new "red tide" of
restraints appeared in the draft conference bill language.
        Though Netheads in Washington, such as D.C. Internet Society
Chair Ross Stapleton-Gray, reassure us that the Internet will remain
"pretty much the way it is now," and that neighborhood Internet service
providers (ISPs) will generally be able to offer access at continuing
competitive rates, insiders who have studied the language of the bill have
grave concerns about how the Internet of the future will look.
        A senior counsel on the Senate Justice Committee told the American
Reporter last week that new draft changes will put back into the bill the
original Cox-Wyden language (AR, No. 65) that would have prohibited the
FCC from "economically regulating" the Internet. "Nobody really knows what
this means," the source said.
        In a style now familiar to reporters covering the telecom bill,
House Commerce Committee Chairman Tom Bliley (R-VA) prefers critical
conference decisions to be made in the dark corners of Capitol offices and
meeting rooms as far away from open committee meetings as possible.
        A "signature sheet" is presently being substituted for open
discussion and debate.  This assures that so-called "technical" changes
and at least one "substantive" change to the draft telecom bill, according
to Senate Commerce Committee staffers, can proceed without conferees
understanding too much about what the changes really mean.
        The proposed language prohibiting the FCC from regulating the
Internet is doubly ironic in that it was not part of the Cox-Wyden measure,
which overwhelmingly passed the House on a vote of 420-4, and an FCC role
for "describing" measures to regulate Internet "content" is positively
sanctioned in the draft language.
        Title V of the bill, "Broadcast Obscenity and Violence,"
classifies the Internet as equivalent to a broadcast facility and
regurgitates the now familiar criminalization of speech measure inserted
into the bill by the Christian Coalition's poster boy, House Judiciary
Chairman Henry Hyde (R-IL).
         Hyde, always eager to please fundamentalists, rammed his
amendment through the House conference caucus on a razor-thin vote (AR No.
174) of 17 to 16, with members saying later that they did not understand
the implications of what they voted for.  This change in the House
language brought it into line with the Exon "indecency" clause in the
Senate bill.
        Part of this regulatory cowpie is thrown into the FCC's lap (whose
budget of course is chopped by the Congressional-deficit boys). The bill
states:  "The Commission may describe measures which are reasonable,
effective, and appropriate to restrict access to prohibited
communications..."
        But, while permitting the FCC to "describe" such measures, the
bill expressly states that the agency has "no enforcement authority over
the failure [on the part of providers or users] to utilize such measures."
        This part of the bill is a honey-trap for litigators.  Placing the
FCC solely in an advisory role literally ensures that all of the
interpretation, implementation, and enforcement will be undertaken by the
courts and the Department of Justice.  Of course, numerous individual and
organizational users and providers will get caught in the cross-fire.
        Other measures tucked away in the telecom bill's turgid prose seem
to have escaped the scrutiny of many self-styled Internet defenders,
protectors, and aficionados.  Interconnection and equal access have barely
passed the lips of Net mavens in connection with the telecom bills, yet
these provisions in the draft bill could leave Net providers out in the
cold without protection from gusts of corporate capriciousness.
        The draft bill states that "each telecommunications carrier has
the duty to interconnect directly or indirectly with the facilities and
equipment of other telecommunications carriers" as well as the the duty to
provide "to any other telecom carrier" interconnection and
"nondiscriminatory access to network elements on an unbundled basis..."
        What are "network elements," and why is "interconnection"
important? The House telecom bill, H.R. 1555, clearly spelled these out,
prior to its re-write by the conference committee.
        In the language of H.R. 1555, "a local exchange carrier" had to
offer to those providing "a telecommunications service or an information
service, reasonable and nondiscriminatory access on an unbundled basis ...
to databases, signalling systems, poles, ducts, conduits, and
rights-of-way ... or other facilities, functions, or information ...
integral to the efficient transmission, routing, or other provision...
that is sufficient to ensure the full interoperability of the equipment
and facilities..." of those seeking such access.
        But, the conferees, under pressure from the Regional Bell
Operating Companies (RBOCs) removed guarantees of access and
interconnection to providers of "information services," which include
Internet service providers.
        In plain English, these changes in the bill mean that ISPs, online
service providers, and any other interactive "information service"
providers dependent upon telecom networks must worship at the altar of the
Bell companies in order to attain "interconnection" and "equal access,"
two vital functions of communications which this bill was supposed to
guarantee and enshrine for the information-centered future.
        In even plainer English, they mean that carriers can play with Net
providers like tigers playing with their prey. As providers of the
critical conduits to Internet backbones, local exchange carriers under
the provisions of the bill can essentially charge information services
what ever the market will bear, thus potentially maiming or killing off
small- to medium-sized ISPs.
        The carriers can also promote sweetheart deals with corporate
monoliths such as Microsoft, TCI, AT&T, MCI, and Time Warner for access at
discounted rates, as determined by volume or a similar measure.  They can
underprice, overprice, or offer no prices, since information service
providers are stripped of all guarantees as the draft law is currently
written.
        These are rather extreme visions.  The reality is that
discretionary pricing may well take place, but the Internet backbone's
national service providers (NSPs) are working with the Commercial Internet
Exchange (CIX), the Internet Society and others to ensure that draconian
results do not obtain.
        Corporate strategy is rapidly developing which will allow
traditional providers control over Internet access and provision.
Diversity will hang on a while longer but the wind is clearly blowing in
the direction of conglomeration and concentration -- in no small part
because telcos in the U.S. are rapidly grasping the fact that long-term
marginal costs for local calls are moving toward zero.
         Pricing is increasingly geared toward toward the content that is
accessed, rather than transport costs.  Carriers are restructuring in
order to dominate the markets for content provision.
        The threat to small- to medium-sized ISPs as well as other small
businesses providing information services is real. The conference
committee draft already anticipates the problem.  The title of its
Kafkaesque Section 257, "Market Entry Barriers Proceeding," calls for
remedial action by the FCC for anti-competitive conditions which the bill
may actively foster.
         It stipulates that "within 15 months after the date of enactment,"
"the FCC shall complete a proceeding for the purpose of identifying and
eliminating ... market entry barriers for entrepreneurs and other small
businesses in the provision and ownership of telecommunications services
and information services, or in the provision of parts or services to
providers of telecommunications services and information services."
        The FCC is supposed to complete this proceeding using criteria
which will favor "diversity of media voices, vigorous economic
competition, technological advancement, and promotion of the public
interest, convenience, and necessity."  The next FCC review would not come
for three years, thus placing an enormous burden on the agency to get it
right in its first rulemaking proceeding.  In the fast-moving
communications world, a three-year lag time can be equivalent to setting
policy in stone.
         Apparently, for the conference leadership, having the beleaguered
FCC take on additional burdens is more palatable than taking the
Congressional responsibility of rectifying the problem in law, and thus
risk flying in the face of powerful interests filling campaign coffers.
        However, in the most unkind cut of all, the bill managers in this
Kafka-like castle on the Hill intend to strip the FCC of economic
regulatory authority over the Internet, thus rendering the above provision
moot. The FCC will have no power to redress market entry barriers such as
distorted conditions for interconnection and access, or skewed pricing, if
the rider on the "signature sheet" currently circulating makes its way
into the bill.
        This outcome, depending on its specific language, could well
impact Internet access to schools, hospitals, and libraries.  The bill
requires telecommunications carriers to provide "any of its services that
are within the definition of universal service" to schools and libraries
at reduced rates.
        But, if the above qualification goes into effect, the definition
of "universal service" could not include the Internet because it could not
be "economically" regulated by the FCC as a "universal service." Net
pricing for schools, hospitals, and libraries may therefore be up for
grabs in a free-for-all commercial environment.
        In a bill which is a patchwork of compromises between industry
giants, this Congress insists on behaving recklessly and destructively
with regard to the Internet and its constituency. And, many of the
conferees, as the old saw goes, appear to not "have the sense to pound
sand in a rathole."

                                -30-

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                      The American Reporter
          Copyright 1995 Joe Shea, The American Reporter
                       All Rights Reserved
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 Posted by Richard K. Moore (•••@••.•••) Wexford, Ireland
 •••@••.•••  | Cyberlib=http://www.internet-eireann.ie/cyberlib
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