Telecommunications Industry Working Overtime to Misrepresent Net Neutrality

I don’t believe that money is speech, but I’ve repeatedly seen that money motivates dishonest speech, much of it uttered by paid “experts.” This money-motivated dishonesty is a recurring problem regarding many issues, including the topic of this article, net neutrality.

On August 8, 2011, I was pleased to see that the St. Louis Post-Dispatch published my letter to the editor on the topic of net neutrality. Here’s the full text of my letter:

Maintain Neutrality

We pay Internet service providers to move data from point to point. We don’t pay them to steer us to selected sites (by speeding up access times) or to discourage us from using other sites (by slowing down or blocking access). Nor do we pay them to decide what applications we can use over the Internet.

I should be free to use Skype even if it competes with the phone company’s own telephone service. Giving Internet users this unimpeded choice of content and applications is the essence of “net neutrality,” and it has inspired unceasing innovation over the Internet.

The Senate soon may vote on a “resolution of disapproval” that would strip the Federal Communications Commission of its authority to protect Americans from potential abuses. If it passes, net neutrality would be at serious risk.

Congress is under big pressure (and receiving big money) from companies like AT&T, Comcast and Verizon, who want to become the gatekeepers of the Internet. They would like to carve up the Internet so that it would become like cable TV, with tiered plans and limited menus of content that they would dictate. Phone companies should not be allowed to dictate how we use the Internet.

I urge Sens. Claire McCaskill and Roy Blunt to support net neutrality by voting against the resolution of disapproval.

Erich Vieth • St. Louis

I wrote this letter as a concerned citizen. I have long been concerned about net neutrality. I have seen ample evidence that increasingly monopolistic telecommunications companies have no qualms about forcibly assuming the role of Internet gate-keeper. As for-profit entities, their instinct is to limit our Internet choices if it would make them ever greater piles of money. Call me a pragmatist based on America’s television experience; telecommunications companies want to control how we use the Internet much like cable TV companies shove users into programming packages in order to maximize profit.

On August 18, 2011, I noticed that the Post-Dispatch published an anti-net-neutrality letter. Here is the text of that letter:

Net Neutrality May Threaten Jobs

That the national unemployment rate remains at 9.1 percent has caused worry about the health of America’s economic recovery. With Missouri’s unemployment rate at 8.8 percent, there is little proof that the Show-Me State’s economy is improving.
Instead of encouraging businesses to expand and add jobs, the Obama administration continues to create potholes on the road to recovery. A clear example is found in the actions of the Federal Communications Commission.

Just days before Christmas last year, the FCC issued its net neutrality rules that several experts, including the FCC commissioner, claim will harm industry and innovation. The result? A policy that threatens an industry that consistently has added jobs and investment to America’s economy.

Even in the recession, the telecommunications industry invested more than half a trillion dollars into wired and wireless infrastructure. One study states that the investment in the broadband sector by the telecommunications industry created more than 434,000 jobs.
Missouri’s struggling economy will be hard hit by a loss of telecommunications investment and employment. A recent TechAmerica Cyberstates Report found that more than 96,000 Missourians work in the high-tech and telecommunications industries — the very sectors that net neutrality will threaten.

Net neutrality rules and other burdensome federal regulations have created an uncertain environment that slows the steady stream of capital expenditures and reverses the gains that have been realized in this sector despite economic hardship.

If you want Washington to pursue economic recovery, encourage Sen. Claire McCaskill, D-Mo., to vote against funding net neutrality.

Stephen DeMaura • Alexandria, Va.
President, Americans for Job Security

I was surprised to see that the Post-Dispatch published a letter making such outrageous claims What is “Americans for Job Security?” I wondered. From the AJS website I learned the following:

From the beginning our message has been a simple one: free markets and pro-paycheck public policy are fundamental to building a strong economy and creating more and better paying jobs.

Who funds AJS? From the AJS website I learned the following:

Who are your members? Our members are businesses, business leaders and entrepreneurs from around the country. AJS does not disclose or discuss its membership further than this. Too often politicians or the media define an organization or message not by the merits of the argument, but rather by the perception of the people associated with it. We would rather the people decide on merits instead of name-calling.

Therefore, AJS is a front-group for business organizations that lack the honesty and moral decency to take responsibility for their own paid propaganda. These secret businesses hide behind AJS to make it appear that an independent organization spontaneously finances the promulgation of pro-business propaganda. Consider the adage: Follow the money. Who else, other than telecommunications businesses would be financially motivated to pay AJS to bash net neutrality? Who else would be so motivated to keep its identity secret? This is Citizen’s United democracy in action in 2011. AJS and its clients are trying to make it look like its Post-Dispatch letter to the editor was not motivated by financial profit-seeking by multi-billion dollar telecoms.

How much money does AJS throw around to do its issue-advocacy? We learn the following from factcheck.org:

Since its inception AJS says it has raised nearly $60 million and run more than 90 different TV spots in 46 states and the District of Columbia. DeMaura told FactCheck.org that as of mid-August, the group had spent $6.3 million in the 2010 election cycle . . .”

Factcheck.org also indicates that Stephen DeMaura’s organization is a pro-business issue advocacy organization with history of not being forthright:

In 2008, staff lawyers for the Federal Election Commission saw “reason to believe” that AJS had violated federal election law by, among other things, failing to register as a political committee and failing to disclose its donors. But in 2009 the three Republican commissioners on the FEC blocked any action, voting to dismiss the case while the three Democratic commissioners voted to pursue it. Since a majority is required for the FEC to act, the partisan 3-3 deadlock killed any enforcement action against AJS. When the Supreme Court later struck down longstanding federal laws against campaign spending by corporations and labor unions, AJS President DeMaura told the Wall Street Journal the decision was an “unequivocal victory” for those “who believe in free speech and the rights of organizations such as ours to promote our point of view.”

To sum up so far, AJS is paid big money by secret donors working hard to hide their own identities in order to make it look as if AJS is internally motivated to deliver its messages based on its pro-business free-marketer ideology. Certainly none of this was apparent in the AJS letter to the editor. And, apparently, AJS monitors newspapers, poised to send out counter-letters in case readers who lack any profit motive (e.g., people like me) urge politicians to enact laws with some teeth to keep the Internet open and non-discriminatory.

But the above is simply prelude. Let’s look more closely at the central claim of AJS, that net neutrality will supposedly destroy jobs and hurt the economy. This claim of AJS can be restated as follows: It will hurt the economy if Internet users are allowed to freely access the web content they choose, using legal software and legal devices of their choice. Where does AJS come up with such a laughable claim? It’s likely that AJS is relying on this 2010 study by Charles M. Davidson and Bret T. Swanson, often cited by conservatives. The study claims that the telecommunications companies will be economically strangled if they are forced to abide by the FCC’s Fifth Principle:

Subject to reasonable network management, a provider of broadband Internet access service must treat lawful content, applications, and services in a nondiscriminatory manner.

The Davidson/Swanson article offers this wobbly analysis at page 26:

While each of the proposed principles is subject to reasonable network management, unfettered implementation of the fifth principle could have enormously negative impacts on broadband service providers and the wider broadband ecosystem.

Do you see the problem already? The Fifth Principle (quoted above) specifically provides that it would be implemented “subject to reasonable network management.” The FCC has provided some guidance on what would pass as legitimate “management” (e.g., telecoms would always allowed to “manage congestion on networks.”). Despite the fact that net neutrality allows the telecoms to manage their networks, Davidson/Swanson conduct their analysis on the basis that the Fifth Principle will be implemented in an “unfettered” manner. In my experience, “mistakes” of this magnitude are almost always externally motivated.

This Fifth Principle of the FCC (and one other principle) would complement four basic principles previously adopted by the FCC adopted in 2004 to “preserve the freedom of use broadband consumers have come to expect.” Here are the four original principles:

• Access the lawful Internet content of their choice;
• Run applications and use services of their choice, subject to the needs of law enforcement;
• Connect their choice of legal devices that do not harm the network; and
• Competition among network providers, application and service providers, and content providers.

You can find links to all six FCC net neutrality principles here.

At page 27 of their article, Davidson/Swanson argue that enforcing the Fifth Principle would hurt consumers, and that there is no need to enact any such rule because the FCC can consider disputes on a case-by-case basis. Yeah, why bother with a straight-forward principle like the Fifth Principle? Who needs clear guidance like that on the books? I hope the authors at least got some coupons for free call-waiting in return for claiming that phone companies will whither away and die if they are forced respect net neutrality. But I’m just scratching the surface. The economics arguments of the Davidson/Swanson article are thoroughly harpooned here.

What do small businesses think about net neutrality? They strongly disagree with the conclusions of the study on which AJS apparently relies. Why should it be that babysitting the telecoms–keeping them from straying outside of their only legitimate mission (moving data through the pipes)–should be framed as “loss of jobs” or “lost profits”? The quick answer is that this is manipulative framing. We don’t allow carpenters to do plumbing. We don’t allow surgeons to do architecture. “Gatekeeper to the Internet” is not a legitimate job function of telecoms, so it ludicrous for them to claim that they are being deprived of money they could make if only they were allowed to do things other than the things they should be doing.

AJS offers no credible evidence to tie net neutrality to loss of jobs, but does allude to unnamed “experts.” I can’t agree with these secret “experts” because there is no credible evidence on which any honest person can tie net neutrality to job loss. (and see here). Here is a highly detailed position paper debunking economic criticism of net neutrality, authored by Free Press.

The Davidson/Swanson study and the AJS letter are especially absurd because they frame net neutrality, a multi-faceted public-policy issue, only in terms of profits and jobs, ignoring the fact that outside innovation by many small players would be threatened to the extent that net neutrality is threatened, and that the lack of net neutrality would give the telecoms immense additional power to stifle innovation. Hurting net neutrality also gives the industry the power to financially hurt consumers; why is it that those who claim to worry about jobs don’t worry about increased consumer costs due to phone companies shutting down free services that compete with their for-pay services?

The above study and AJS both ignore the interests of ordinary citizens, including their First Amendment interests. How outrageous is this cramped framing of the issue? Imagine that Congress were considering a new labor law that would allow young children to work full-time in factories. Then imagine a sophisticated think tank like AJS issuing a statement that this “Give Children The Freedom to Work” law should be passed because it will mean lots of jobs. Even if you discuss job losses and gains for 50 years, you will not touch on the importance of net neutrality to our democracy. The Internet offers real power to the People, including the power of citizens to become journalists, video-producers and activists. It is the only meaningful way many of us have to organize sufficiently to have a voice in how our government runs. The Internet is a precious national resource that should never be weighed merely in terms of “jobs.”

In its letter to the editor, AJS asserts that “the FCC commissioner” claimed that net neutrality will kill jobs. This is an especially bizarre claim. Whoever that commissioner is, he or she has a name, but AJS withholds that name. There are actually five FCC Commissioners, indicating to me that AJS doesn’t care about the facts or that AJS is being intentionally vague about the identity of the an FCC commissioner in order to make it difficult to check the veracity of this claim. Perhaps AJS is suggesting that FCC Chairman Julius Genachowski claims that net neutrality will lead to the loss of jobs, but that can’t be true, because Chairman Genachowski actually concluded that net neutrality creates jobs. Maybe AJS is referring to former FCC Commissioner Meredith Attwell Baker, though I can’t imagine AJS would be relying on the opinion of a woman who should be under intense criminal investigation for voting for the Comcast merger with NBC only a few months before announcing that she would be leaving the FCC to become a lobbyist for Comcast.

The letter written by AJS is troubling for many reasons, perhaps the most important one being that 98% of Americans have only one or two choices when shopping for a broadband company. What are you going to do if your carrier violates net neutrality? Move to a different state so that you can have a different phone company? AJS also fails to recognize the history of net neutrality violations already committed by telecoms. (and see here) There are well-documented reasons for not trusting for-profit telecoms to be the Internet gate-keepers (and see here). For those just getting acquainted with the topic of net neutrality, consider this summary of the importance of preserving net neutrality. And also see here for another thumbnail article. Also consider this helpful summary of net neutrality at Wikipedia. Also, consider the following primer on net neutrality by Senator Al Franken:

What’s really behind the ferocious fight by the telecoms against net neutrality? It’s this: “the true motive beneath ISPs desire to discriminate is not the possibility of earning new third-party revenues, but the protection of legacy voice and video services from the disruptive competition enabled by the open Internet.”

The real concern of the telecoms is money, plain and simple, and they don’t care that their new scheme for making money will wrest control over how to use the Internet from people like you and me. The extent to which they don’t care is well-illustrated by this quote from former AT&T CEO Edward Whitacre (referring to Google and other content providers): “Why should they be allowed to use my pipes?” Go here to see the crushing response to Whitacre’s comment by Ken Fisher.

I was motivated to write my newspaper letter to the editor because of the pending Resolution of Disapproval:

Resolved by the Senate and House of Representatives of the United States of America in Congress assembled, That Congress disapproves the rule submitted by the Federal Communications Commission relating to the matter of preserving the open Internet and broadband industry practices (Report and Order FCC 10-201, adopted by the Commission on December 21, 2010), and such rule shall have no force or effect.

This resolution would effectively repeal this FCC Rule. I should make it clear that I am not thrilled with the FCC rule. The FCC rule is, in several ways, terrible. For instance, it assumes an FCC hands-off approach to the wireless Internet, the fastest growing aspect of the Internet. And, as I mentioned above, these issues I am discussing are all the more dangerous to Americans due to the rise of “corporate communism,” evidenced by the current disturbingly high degree of consolidation regarding wireless. Despite the flaws of the current FCC rule, though, I would much rather have the not-for-profit FCC serving as the Internet gatekeeper based on the six announced Principles than to allow for-profit telecommunications companies to serve as gate-keeper. If the gate-keeping function falls into the unfettered hands of the telecoms, they can be expected to run what amounts to protection racket: “If you want to run on the speedy internet highway, you’ll need to pay a special toll.” And I can hear it now, “Sorry, Skype, our technicians tell us that your free voice-over-internet phone service clogs our pipes, so we can’t give you any more access. Perhaps you’d like to sell your company to us, though . . .” If we can’t enforce net neutrality, we can expect to hear that huge sucking sound of investment leaving self-employed and small-business programmers, because they will no longer have guarantees of cheap access to the Internet. Don’t believe that net neutrality kills jobs. Nor does it kill legitimate profits. Rather, it keeps the big telecoms from trading our freedom to use the Internet for higher profits gained through coercion, not competition.

Why break the law when you have hundreds of lobbyists flooding the halls of Congress? Here are some amazing statistics on the army of lobbyists hired by the telecoms. Why break the law when you can change the law? And why engage in honest and upfront debate when you can hide behind shell advocacy groups that spew your lies that running the Internet the way it is currently being run will ruin the economy? I fear that these lies will work and that we will lose net neutrality, given that politicians are under massive pressure to vote for “jobs.” Compounding things, consumers are not sufficiently organized to speak as one coherent voice on this sometimes esoteric issue of net neutrality. And worst of all, our political system is thoroughly corrupted because our representatives are financially motivated to do the bidding of big business in order to get reelected. But we should not ever give up this fight.

“I wanted you to see what real courage is, instead of getting the idea that courage is a man with a gun in his hand,” he tells his children. “It’s when you know you’re licked before you begin but you begin anyway and you see it through no matter what. You rarely win, but sometimes you do.”

– Atticus Finch, in “To Kill a Mockingbird.”

The point of my letter to the editor was to briefly describe the issue of net neutrality, and to urge citizens to urge their senators to support true net neutrality. It’s too late to contact your congressional representatives, because they have already “decided to give phone and cable companies absolute, unrestricted power over the Internet.”

Please spend a bit of time to acquainting yourself with this critically important issue. It’s important to you and to our democracy. Then call your senator and urge a NO vote on the upcoming Resolution of Disapproval. Tell your senators that you don’t want for-profit companies dictating how we use our Internet. And tell them to ignore the dishonest puppets who work for the telecoms.