Like a Headache Run Amok, Net Neutrality Just Won't Go Away!

By Paul Maxwell Report Archives
Cover image for  article: Like a Headache Run Amok, Net Neutrality Just Won't Go Away!

Just in case you've missed over a dozen years of back-and-forth, here's a quick history of Network Neutrality. It started back when Tom Wheeler was the Federal Confusion Commission chairman. Wheeler had been the head of two major communication associations: the cellular and the cable TV groups. He clearly was qualified to lead the FCC. He had spent a number of years arguing with regulators and he knew, because he'd argued against it so often, how to regulate.

So, regulate he did.

In the true nature of Washington, D.C., an anti-regulator followed Wheeler as FCC chairman … Michael Powell.

Powell's FCC decided the regulations were onerous … so, he watered them down to a "light-touch" sort of regulatory structure. Of note, it by and large has worked.

Once again proving that in D.C., change follows change, one of those groups, the "NCTA -- Internet and Television Association" (originally just the "National Cable Television Association"), got the new guy to run the place as broadband became the new game in town.

Meanwhile, in 2018, California passed the state's own Network Neutrality Act in defiance of the FCC … and litigation prevented it from going into effect until … now … with more suits to come.

Even Gigi Sohn (who once advised former Federal Confusion Commission chairman Wheeler about how wonderful the idea of regulated neutrality should be) might even get another say. After all, the Democrats are in the majority again, and she's on at least one list as landing somewhere in regulatory land.

But here's what's worth paying attention to today: the rise of regulation aimed at the "fringe" of the internet … better known as the "tech" world … or, as some might have it, the freeloaders. You know who: Facebook, Google, Twitter, Amazon and now the burgeoning streamers plus everyone else that uses the internet but doesn't really pay their share.

The internet is in the midst of repurposing the concepts of who pays whom for access, distribution and upstream … and more.

So, what's likely to change? Well, let's consider the current state of media versus where it was.

For starters, streaming is rapidly replacing linear, the once-dominant distribution pattern of so-called cable TV networks. USA Network once ruled the roost … now, any programming with a "+" at the end rules a smaller roost (except for Disney+). Others are growing fast as they navigate the new world of set-top-box access controls that only work pretty much with only programmers that pay the many gate fees.

In addition, it's starting to look like regulators might finally take a new look at the mandated pattern of over-the-air broadcasting with its "heads I win, tails you lose" must-carry negotiations with cable and telco infrastructure incumbents. (That happened via a 1992 act that, whenever a cable or telco or satellite distributor dares to complain about rates has resulted in hundreds of blackouts of local carriage … many of them just as viewers were waiting to watch major sports events.)

Relief might come from a longshot bipartisan bill from Rep. Anna Eshoo (D-CA) and Steve Scalise (R-LA) that would repeal the must-carry aspect, leaving it up to negotiations under copyright law. Or, more realistically, look for open warfare over cable before broadcasters bullet-proof 3.0 Next Gen streaming via the internet from their local broadcast towers.

Of course, one potential "solution" to today's conundrums is everyone eventually going retail as the wholesale market devolves. Sort of a situation for the long-wanted ability of subscribers to buy video programming access on a direct basis.

Or, spoiler alert, this is how subscribers are, as we write, learning that direct buying will cost more for the full panoply of lusted-for programming by buying directly than from the wholesaler.

In any case, the internet connectivity provider will turn out to be the real winner with the best margins ever seen! Once-called cable today represents about 70% of the market.

And, to prove the point that the infrastructure provides the best return … take a look at T-Mobile's and Verizon's 5G initial tests by CNET that showed early broadband deployments provide some positive results for cellular high-speed connectivity.

Stay tuned. It's going to be intriguing, with big winners and … of course, losers.

Random Notes

As the "pan-damn-demic" has made clear, this nation has a severe digital divide problem. In case you doubt that, just go to your local library before opening time and count the number of cars and/or bicycles in the lot with kids doing their homework courtesy of the libraries' free wi-fi.  Or, soon, at a number of Comcast offices.

Well, there is always Congress and the regulatory bodies to jump to propose help. First, the FCC: the COVID-19 relief bill of $7 billion provides for up to $50/month to low-income households and up to $75/month to households on Native American land … and the FCC will spend up to $100 for a connectivity device. The FCC's Brendan Carr (R) is working on a roadmap for 5G.

On the Congressional side, a new bill from Sen. Amy Klobuchar (D-MN) and Rep. James Clyburn (D-SC) proposes $94 billion to remedy digital inequalities.

In the states, Ohio's budget proposal includes $210 million for internet access. In Nebraska, some 11 bills have been introduced so far to expand access. And, in hard-hit Texas, Republican senators have proposed a Broadband Development Program to better map access to allow targeted build out help, especially for small towns.

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