 This is the Daily Tech News for Friday November 14th 2014. I'm Tom Merritt joining me today Ms. Molly Wood personal technology columnist for the New York Times and my friend And work from home lay about and work from home lay about woman of pleasure. Okay So the news on the net neutrality front today You heard some of it obviously in the headlines, but also Comcast CEO Brian Roberts While trying to unveil some features that make Xfinity TV service a little more like internet TV Obviously Realized that everybody wanted to hear his opinion on net neutrality. So he met it ahead on among the things he said was we've had 20 years of a set of rules that have built. I think this wonderful world that we all enjoy I mean that happiness through it's true Well, yeah, here's here's the thing and and Roberts actually is trying to be positive He's saying I agree with all of the principles that President Obama set out I don't think you want to do it with title to and that's what all of these guys are saying is you don't want to think We don't want to do it with title to Problem with all of this debate is that we're debating entirely the wrong things, but Molly I'm gonna let you go first. Yeah, how how are you feeling about the way this debate is going? I Mean, I you know, I think it's funny because it is easy in some ways to say look This is exactly the same debate that it's been for the 10 years that we've been talking about it which is Can you really trust the companies with that stand to make all of the money and that stand that have arguably monopolies in some areas of this country and that have not always been good actors when it comes to their Stewardship of this increasingly invaluable resource that being the internet so I Think from that perspective the argument really hasn't changed that much But now it's become much more complicated because the conversation is so much about access to Over-the-top video to TV right to Netflix to CBS services to streaming video to Hulu and Then it's been further confused by all these conversations about interchanges and you know peering connections and Netflix paying Comcasts for guaranteed service, so it's gotten more confused and weirdly more political than ever But at the end of the day I think it still comes down to the simple question of having a really good broadband Infrastructure and whether we can trust these guys to build it without All of their sort of like commercial desires getting in the way right and I Even would say commercial desires are fine. In fact commercial desires can can spur innovation That's why we have Netflix. It's not because Reed Hastings had some kind of altruistic need to make House of Cards It's because he wanted to make a company that would make money right and there's no reason that ISP shouldn't be able to make money I think that's one of the things that that ends up being a problem on these these sorts of debates Is that it you you tend to want to break it down as for the people for the business Right and then it doesn't need to be broken down that way In fact, that's not the way it works best on the internet the way that from my understanding transit providers and backbone providers have worked is providing business motivation to interconnection and I think where it has really broken down and I've said this a million times is that the ISPs have gotten too much leverage The the bigger ISPs is you know the Comcast the Time Warner's of the world have gotten too much leverage now What do you think of of that? I mean if we were to say like let's break up the ISPs I think that'd be going too far, but how do you fix that? Yeah, I mean the only way that you're ever going to fix that is through competition And I think we've seen over and over that we do not have a sufficiently competitive landscape You didn't really even see these guys starting to invest seriously in their networks until pretty recently when they started to realize that they were having significant competition pressures from Wireless, you know from high-speed wireless and that they couldn't deliver Netflix I mean crazily enough that the the push to upgrade their infrastructure came from Companies like Netflix and from them streaming long-form video content, which they apparently just didn't see coming But until then they were busy sort of like creating fiefdoms I mean Comcast controls a huge part of the market and is trying to buy Time Warner like you just don't have a enough legitimate choice in this country and enough legitimate competition And I actually don't think that wireless is true competition to wired broadband at this point So they haven't had the right incentive to build out their broadband networks If they do if the free market actually worked and they had plenty of competition Then I think we would have broadband networks. We'd all be pretty happy with right I we had lots of competition in the dial-up era and in the dial-up era Everybody could use the phone system because it was a common carrier to run their ISP Then DSL came along and the DSL networks were Under common carrier under title to force to unbundle and open up their networks to competitors What happened was they delayed that that is when the push for classification of ISPs as information services came and they without using regulation essentially put in Really difficult ways of putting in DSL. I remember trying to get DSL installed in 2000 in San Francisco was a nightmare Because they said well if you're using you can't use that kind of box. You can only use this kind of box They put in incredible amounts of roadblocks to prevent competition and since the regulatory Agencies were swinging away from common carrier. Anyway, they didn't bother to follow up and try to change the situation so now you have a situation where the ISPs were Entrenched monopolies in their beginnings, right? All of these local telcos were monopolies at one time all of the cable companies for the most part were given monopoly franchises at one time and They have benefited from that They also benefit from local regulation is a great article on wired where it talks about how difficult it is For any income anyone to come in again the incumbent if you try to actually roll out a new ISP you face Tons of bureaucratic nightmare You face all kinds of local fees you face lawsuits from the incumbent who's like well You know, you're you're trying to use our polls and those polls are owned by us Most of these are frivolous and get thrown out of court, but they they cost you money of time and money exactly. Yeah, so Essentially We don't have enough competition. Now some people are trying to I've got five providers Do you have five providers that provide you 10 megabits per second or more even? Do you have you know, do you definitely don't have five providers that give you gigabit? Most people feel like they don't have more than two choices and that those two choices are basically Not much of a choice. Yeah in a lot of places. It's cable faster internet versus DSL slow internet Yeah, and that's just not a reasonable option So in my opinion if you if you if you look at that and you say, okay Well, what can we do for competition? There's two there's two ways. It's worked elsewhere in Europe They unbundled the loop they said look you can't own the infrastructure and be the ISP at the same time And that has worked that has worked fairly well. That is not the only way to do it though And and when we did the the special the summer we found out that in Korea They just made it easy for people to invest and roll out infrastructure And so they have they had five at one time Fiber networks in Seoul Korea because the government actually worked to the opposite of the way local governments work here They said yeah, we'll make it easy for you to run infrastructure and it's not efficient They all have their own lines and they'll have their own boxes, but they have competition So what we did was we did the worst of both sides We let a monopoly build up all the infrastructure with a lot of government help sometimes subsidized funds Sometimes just easements and then we made it really hard for anyone to come in and compete with them Because the cities are broke and they're like well we want our taxes We're not gonna make it easy the incumbent telcos are like that's right Don't make it easy for them make it really hard and nobody can break that logjam at the same time Any kind of regulatory agency that would come in and suggest unbundling is just gonna get firebombed at the national level Yes, they're gonna get creamed and then the results is that we're now having a conversation about Reclassifying the internet as a title to utility which is the wrong law to apply These are the these are rules that were as we've talked about not designed for something like the internet They're just not going to be efficient They're not gonna cover the interconnect and peering agreements that are already sort of the subject of so much controversy And it's just not it's the wrong solution, and it is an over-regulation I mean I think you and I probably agree and have been saying for a decade that the worst thing that could happen Was that these guys would behave in such a way and such an untrustworthy way that the government would come in and Over-regulate the internet. I actually do not think that we need that you know that ideally we would foster enough competition maybe through subsidies or some sort of Specific incentive programs that what we would get is faster broadband for all in that we would have you know Like a rising tide floats all boats I feel like there's a part of me that could be arguing for some kind of a trickle-down thing and that makes me uncomfortable But you know what I mean. Yeah. Yeah, which is that ultimately we don't need We don't want a bunch of government regulation that will not help the internet. It will not I agree Unless it is like a new law a new set of rules that are crafted specifically for this very unique entity and That what we really need is just faster broadband because we also don't need fast lanes if we just have faster broadband That doesn't affect traffic shaping like traffic shaping and prioritizing video and prioritizing emergency channels. None of that Has to be in violation of the spirit of net neutrality. It isn't right Net neutrality doesn't say that you have to treat every packet equally and that you have to deliver them equally It says that you have to treat all the content equally and not favor one over the other and not charge Smaller companies at an essentially a tax to get on to the internet and make it prohibitive for them to do so in an unfair way So all we want is faster broadband and then it will work fine for everybody. It will now a lot of people say Brian Roberts was one of them. We've had 20 years of a set of rules that have built a wonderful world Thing is it's not a horrible world, right? And and that that's where the People have started to divide up into camps. You're wrong and you're wrong. It's a disaster Well, it's not a disaster. So it's easy for the other side to say no It's not a disaster We have you know 50 megabit per second internet available in lots of places But there was the new America survey that came out in June that looked at all of the top 224 cities for broadband some in the u.s. Some not and they determined that the United States Pretty much pays more for slower internet than the rest of the world Highest ranked city was Seoul with a private ISP number two are actually tied for number one Hong Kong with a private ISP Tokyo with a private ISP, you know, who else was up there? Chattanooga with a municipal ISP Kansas City Google fiber Lafayette with a municipal ISP Then you get Zurich then you get Bristol, Virginia with a municipal ISP So why is it that the rest of the world these so-called socialist countries are having private ISPs? Give them the fastest broadband We're here in the United States where we have open enterprise and we've had 20 years of wonderful rules Only the government-run stuff is giving you the good broadband at the right price. That's not right That's not the way it's supposed to work That and then all the ISPs are going after all the municipal laws saying well, we can't actually compete with them So let's just pass laws to make them illegal to make them elit to make Municipal broadband illegal exactly. I mean, it's a it's a just a bizarre situation when you think about it and it is exactly what happens when you don't have competition and so every Conversation that this comes down to has to include the competition Element like you have to make that a crucial part of the plan because otherwise you will just continue to regulate virtual monopolies and I Don't think that we are to the point yet where like I said where wireless can be considered that competition and so that to me That's a straw man. Like they still charge so much for access that to use Wireless hotspot as your full-time data connection is absurd Yeah No, and you and I were talking on the phone yesterday and I don't you know I don't want to try to pretend like this is a new idea, but we were both saying really the solution is new legislation Right title 2 isn't right because it's meant for phone And you have to forebear the crap out of it to make it even fit title 1 is also right not right because Internet is more than just an information service and it's that was not meant for the internet either Let's let's actually create a title that governs internet and let's do it right That is politically impossible right now. Unfortunately. It is. I mean, I don't necessarily I Have zero faith that such a law could be written in a way that would be palatable to anybody I guess my question is what would that law say? I mean what so what are the parts that need to be governed because realistically I can't believe I'm gonna argue this but realistically if we had sufficient competition Would there be a need for strong net neutrality regulation because in a scenario where Companies and consumers can choose alternatives Except then you get like Balkanized internet service where some companies say I'm not gonna be available on Comcast because they want to charge Too much for a fast lane prioritization. I don't know I mean would it obviate the need for a net neutrality regulation if we didn't have to worry about somebody messing with packet delivery Here's where I think the ISPs are making a good argument They keep saying look there haven't been any violations and you can argue there have in a couple of specific cases That's certainly a lot most part there haven't been and on the backbone side. There haven't been There there there have been like nasty business Negotiations recently because the ISPs are getting more leverage than they've ever had before But I would argue that yes if you when we've actually had competition No one was talking about net neutrality as it as anything of interest So how do you get the competition is the thing I've been struggling with and I haven't come up with an answer until today? And I'm not saying it's the answer, but the first thing that finally I looked at and said wait that could work is Take away all of these local rules that make it difficult to roll out. You don't even have to use subsidies Go if you want openness go open the infrastructure Open the municipalities for anyone to be able to roll out the city votes and decides it wants to build its own great Let that city do it if a city wants to say, you know what? We're gonna really lower the the bureaucratic barriers. We're gonna lower the fees Which is a kind of a subsidy, but we're gonna we're gonna lower the fees We're gonna make it simple and telcos won't like this because they don't want people to come in and compete But open the access to the ground That is I read over and over today when I was looking through this That is what every person who has tried to build an open free enterprise ISP has run into is Permits construction screws restrictions on equipment purchasing capacity from transit providers It's it's expensive But it doesn't all have to be expensive and if you can make it easier say, you know We're gonna open our municipality for people Google has done us a favor by showing it can happen because what they did is they said look we're a 500 pound gorilla So we're gonna get the municipality to give us a break and they did it in Kansas City And they did it in Austin what happened in Austin when they got the municipality to ease the restrictions all of a sudden AT&T and I think it's century link started rolling out gigabit five or two, right? Absolutely I mean that makes perfect sense and it reminds me of this great Ted talk. I watched that was about On the topic of the city-state, right? It's like we need to stop talking about solutions at the national or yours Certainly at the but even at the national level and start talking about solution building at the sort of city-state Level like cities mayors are the people who have the power to actually make change that can kind of sweep across And so it makes a lot of sense that if you say at the smaller because what you're talking about is a version of the last mile problem Like you can even build a pretty fast wireless network but you still might have a last mile concern and so it makes perfect sense that if you're a and a if you're able to ease the base to competition on a city-by-city Basis that you could kind of dig the ground out from under these big telcos. Yeah, literally Yeah, I like so what do we do here? How do we yeah exactly literally? So how do we like write this up and like make never been do that because I'm afraid they're gonna screw it up Like I am actually now kind of weirdly now I'm worried that they're gonna classify it as a title to and it's gonna be like it's gonna be like a mess Well and thing is if they classified as title to it won't be more of a mess than it is now It'll just be a different mess in lots of different ways. It's it's not gonna solve the problem at all I don't think it's gonna be a disaster though It's just it's just more muck and I want to get us out of the muck Right exactly like so. Yeah, go the Google route, right? Just come around the back side with fiber That's the next question. That's the perfect next question is how do you open up? Localities so that more people can build ISPs. What what do you do? You can you can campaign on your local level and I actually have a much better chance of swing somebody But it's still not guaranteed. Maybe there's some kind of national legislation that would give incentives To municipalities to open up their their their regulations the beer, you know and lower their fees kind of like the way the highway Administration works. I don't know if that's a good idea. Maybe it's not That's that's certainly the most expedient right and probably the the most efficient In terms of a large scale because otherwise you'll just have those the entrenched monopolies dig in further in the places Where they have all the control. Yeah, because I do think fundamentally the conversation about net neutrality comes down to Trying to protect the internet from bad actors and and Behaviors that are so financially motivated, right? Like this is what would separate some monopoly from a good business is when the financially motivated behaviors start to be Anti-competitive it's out of proportion. Yeah, it's out of proportion Exactly, nobody's saying that businesses shouldn't be able to make money What we're saying is that there should be enough of you competing that we start to have that consumer that fundamental consumer level trust That we know you're not going to try to screw us because you can't screw me because I can go to somebody else Yeah, we do not have that on a broad scale now and that's why we're worried about things like That's why we're worried about bad actors bad behavior about about money grubbing basically for lack of it And if you have sufficient competition, I think you could make an argument that you don't need net neutrality regulation Yeah, I think you're right. I mean I regret I You the only thing that I can think of that's an objection to this is people saying Oh, but you know, this is taking away the natural way business is gone Comcast has has worked hard and invested to get where they are today. Why take that away from them Why have the state take that away from them and as we've paid for that the lie is that yeah Comcast AT&T Verizon none of them got that where they are today with open competition They all started with government intervention giving them an advantage exactly Even if that were the case companies still become Anti-competitive monopolies and get in trouble for it when they overreach see Microsoft see the train state You know the train companies like the monopolies can still come into being and that's why we have regulation in the first place An unregulated business completely unregulated business hasn't Always produced bad actors. Yeah, like otherwise we wouldn't have business regulation in the first place So I think I think some light net neutrality guidelines are perfectly reasonable I don't think section 706 gives you the right way to do it. I don't think title 2 gives you the right way to do it But even if you can find the right way to do it there. It's not gonna solve the problem The lie that Netflix and the telcos and the ISPs want you to believe is that the government can fix this What they want is that they continue to allow the status quo to happen Yeah, so that no one can compete with them because they have they have these natural advantages that are almost unassailable Yeah, and because and then you make the I mean we need to make the point over and over that the reason they have those advantages is because we Helped them pay for that. Yeah, our money. They were they were given that step up. That was not yeah And and we've come along we have come a long way in some ways from the ten-year-old argument about conflict of interest Like we that did not materialize thank goodness that right comcast prioritized its own internet TV services over Netflix and you have people getting into the online video delivery space every day, right? And they are all counting on this infrastructure to be able to deliver the product that they are investing heavily in So they obviously believe that it's going to be okay on some level or that they're not going to be throttled in an unfair way So I think ultimately all it comes down to is infrastructure and competition And let me tell you folks as soon as you start to feel That any of these arguments are against your side You've stopped thinking productively. This is not a one-sided or another issue Unless you're a large company trying to protect your your current profit margins This is not a republican issue. It's not a democratic issue. It is an internet issue It's it's about internet management So try your hardest no matter what side you normally are on not to get caught up in that crap Because it's only going to confuse the issue