It may be a while before Congress & Friends get this whole Net Neutrality debate squared away. But that’s no biggie, since Dan Kaminsky has cooked up his own little solution to figure out if your ISP is throttling service. It’s called N00ter, short for neutral rooter, and Kaminsky showed it off for the first time at the Black Hat security conference in Las Vegas, reports Forbes.

Here’s how it works: N00ter scopes out whether or not an ISP is artificially slowing down or boosting traffic to and from a specific site. It basically acts as a VPN, sending traffic through a proxy and masking its source and desired destination. However unlike a VPN, the traffic isn’t encrypted. It’s spoofed on its way from the site to the user, appearing to come from any old web site that the user may want to test. Then the user can compare those speeds with the ones seen on a non-spoofed connection to check if the ISP is in fact slowing down access to the site. Kaminsky also accounted for the possibility that an ISP may try to trick N00ter by building a complementary tool he calls Roto-N00ter, which spoofs traffic flowing in the other direction.

What’s interesting is that Kaminsky wasn’t ready to rat out any already-caught ISPs. “I would never embarrass my friends the ISPs,” Kaminsky remarked. “I’m just warning them now not to do anything you wouldn’t want to see on the front page of a newspaper.” Well, there you have it, ISPs. N00ter is out in the world, and in the words of Kaminsky: “We will find you out. And we will find out in a way that’s incontrovertible.”

It’s one thing when one of us here stand up for Net Neutrality, but when Sir Tim Berners-Lee does it you really ought to pay attention. Why? Oh, you know, because he invented the World Wide Web. You wouldn’t be able to click-click-click around the Web if it weren’t for him. Shocking: he supports Net Neutrality. What does he know, right?

Berners-Lee has joined the Broadband Stakeholder Group in the UK, and the group’s goal is to ensure that ISPs manage their networks in an open and transparent manner. It’s not against ISP network management, per se, but it at least wants the ISPs to be open about their management practices.

The group, like most Net Neutrality supporters, also doesn’t want to see ISPs prioritize traffic based on their own selfish reasons: we have a deal with Company A so we’re going to artificially slow down access to Company B.

But again, Tim Berners-Lee: what does he know?

We now know that Net Neutrality, even if what actually passed wasn’t all that special, faces an uphill struggle to remain on the books, having been voted down at a House subcommittee yesterday. What caught my eye this morning was the amount of money involved, with the nation’s biggest ISPs (AT&T, Comcast, and Verizon) giving out literally thousands of dollars to the committee members’ campaigns. Rep. Fred Upton, for example, received some $94,000 from AT&T over the course of his congressional career. That’s quite a bit of money, I think you’ll agree, particularly given that he’s not from a particularly expensive state (from a purchasing commercials and so forth point of view) in Michigan. So I’ve taken a few minutes to see just how much money the big ISPs have contributed to the members of Congress who voted to de-claw Net Neutrality.

I’ve focused on three companies: Comcast, Verizon, and AT&T. These are the biggest ISPs in the country. I’ve taken the past four election cycles (so, going back to the general election in 2004) and looked up how much money they’ve donated to the 15 congressmen who voted down Net Neutrality in the Subcommittee on Communications and Technology. My assumption was that Net Neutrality has really only became an issue in the past few years, so going back four election cycles should be sufficient to see any sort of possible influence.

The data comes from OpenSecrets, which is a tremendously valuable Web site.

I’ve put all the data in a handy Excel spreadsheet that you can download here.

The following blockquote can be read as a companion to that Excel spreadsheet.

Upton in 2010 also received $10,000 from the National Cable & Telecommunication Association, the “principal trade association of the cable industry” here in the U.S. That same association gave $11,000 in 2008, $10,250 in 2006, and $14,500 in 2004.

Walden in 2006 also received $10,000 from that same association, and $9,999 in 2004.

Terry in 2006 also received $10,500 from Qwest Communications. In 2004 the amount was $19,076.

Stearns in 2010 also received $10,000 from Deutsche Telekom. In 2008 he received $10,000 from the NCTA, and in 2006 he also received $11,000 from that same association.

Shimkus in 2006 also received $10,000 from the NCTA, and $9,621 in 2004 from that same association.

Bono Mack in 2010 also received $10,250 from the NCTA, and $10,000 in 2008, 2006, and 2004.

Rogers in 2010 and 2008 and 2006 and 2004 also received $10,000 from the NCTA.

Blackburn in 2010 and 2008 also received $10,000 from the NCTA, $11,000 in 2006, and $5,000.

Bilbray in 2010 also received $$8,500 from the NCTA.

Gilgrey in 2010 also received $10,000 from the NCTA.

Scalise in 2010 also received $10,250 from the NCTA.

Latta in 2010 also received $9,000 from the NCTA.

Barton in 2010 and 2004 also received $10,000 from the NCTA, $12,000 in 2008 and 2006.

Conclusion Now, I don’t want to draw any conclusions, per se, but looking at the 15 congressmen who voted against Net Neutrality, the top three ISPs gave their campaigns some $868,024 over the past four election cycles. You can interpret that as, well, they were able to knock down Net Neutrality for less than $1 million, which is pretty much a drop in the bucket for these companies.

I guess all I’m saying is, maybe there’s a relationship between the amount of money the big ISPs have given these congressmen and their subsequent “Net Neutrality is evil!” stance, and votes.

Is this all a giant coincidence? Maybe. Again, you’re free to draw your own conclusions, but it’s certainly funny to see congressmen complaining that Net Neutrality will be the death of the Internet etc. years and years after having their campaign coffers filled by the very companies that would stand to benefit from Net Neutrality’s demise.

Keep calm and carry on, I suppose.

Back to the drawing board. The House of Representatives struck a mighty blow against Net Neutrality yesterday, with the communications and technology subcommittee voting against the recently adopted Net Neutrality rules. The rules will actually remain in place until Congress or the president do something about them, ie, send them back to the FCC for further re-tooling or worse.

The 15-8 vote was along party lines. The committee’s Republican chairman (the Republican Party won control of the House in last fall’s election), Fred Upton, of Michigan, said, “If the FCC was truly weighing the costs and benefits of its actions, the agency would not be attempting to regulate the Internet.”

There’s that dreaded “r word” again, regulate. As if making sure ISPs don’t selectively block traffic without telling you, or ensuring that they treat every bit equally, is regulating the Internet.

Keep in mind that Rep. Upton received thousands of dollars in campaign contributions from the likes of Comcast, AT&T, and Verizon in the past several election cycles alone. In fact, AT&T is Rep. Upton’s top campaign contributor of all time throughout the course of his congressional career to the tune of $94,000.

Make of that what you will.

At the same time, it may not even be worth getting too upset over this latest setback given how toothless the Net Neutrality rules the FCC passed actually were.

The Republican Party has a bone to pick with the Federal Communications Commission, and you’ll never guess why. Oh, wait, yes you will. Predictably, several Republican congressmen have come out against the evils of Net Neutrality, despite the fact that it passed several months ago, and despite the fact that it could charitably only be called Net Neutrality Lite. What gives?

The latest complaint, by way of Rep. Fred Upton, of Michigan, and Rep. Greg Walden, of Oregon, centers on two things. One, that the FCC may have overstepped its bounds when it comes to “regulating” the Internet, something the NYU School of Law sorta agreed with. Not that the FCC overstepped its bounds per se, but that it went about implementing Net Neutrality (Lite) using the wrong legal avenues. Oops.

The other part of the congressmen’s assertion is a little less inspired, and that’s that the FCC didn’t show any market-based reason for implementing Net Neutrality in the first place.

I suppose these congressmen never had the please of, to mention one concrete example, Comcast shaping their traffic without so much as their knowledge, let alone their approval. How about, “You want to shape my traffic? OK, I’d like the cancel my service with no penalties, please.”

The idea that the almighty market will ensure that the Internet remains free and open is laughable. Have we forgotten that Google and Verizon capriciously decided that the “mobile” Internet is separate from the “regular” Internet, and that data there should be treated differently than data elsewhere?

And by the way, what market? Hoe many high-speed Internet providers are available in the average American town? You’re lucky if you have one crummy cable operator offering “high speed broadband.” Seems to me if your ISP is treating your data unfairly then you really don’t have anywhere to turn.

There’s your market at work.

And how about this: Comcast was in the top five contributors to Rep. Upton’s campaign back in 2008, and AT&T similarly contributed to Rep. Walden during the previous election cycle. I guess we’re supposed to believe that random congressmen, backed by the very companies that stand to lose if Net Neutrality were to stick around, just so happen to have an interest in seeing the FCC knocked off its perch.

How convenient.

Or maybe that’s what they mean when they say they want the market to dictate policy? Whatever company comes around with a cheque-signing pen gets its agenda pushed. Neat.

Who saw this coming? (Oh, right: everyone.) Verizon has taken umbrage with certain aspects of Net Neutrality, and has taken the rather predictable tract of challenging the FCC’s authority in order to get out of complying with the rules. It’s nothing more than a simple case of if you can’t win an argument based on its own merit attack the credibility of your adversary. Verizon isn’t too keen on the provision that would force it to treat all data on its network equally, so it’s going to court to make sure it doesn’t have to.

Verizon, while claiming to be “committed to preserving an open Internet” (whatever that means), says that it’s “deeply concerned by the FCC’s assertion of broad authority for sweeping new regulation of broadband networks and the Internet itself.” Note the presence of the word “sweeping,” which is designed to make it seem like the sky is falling. Sweeping new regulations? What kind of evil agenda is at work here?

You know, making it so that ISPs don’t treat you and your data like dirt. Such an evil agenda, I know.

Verizon has taken its complaint to the federal appeals court in Washington, D.C. That’s the same court that said the FCC didn’t have the authority to make any sort of Net Neutrality rules, so perhaps Verizon is hoping the court will see things its way.

Meanwhile, the FCC says Net Neutrality rests upon solid legal ground, something NYU Law School has suggested may not actually be the case.

It’s best to keep a skeptical eye trained on any company that claims to be looking out for your interests.

In fact, I still don’t know if I’ve seen any coherent argument against the requirement that ISPs treat all data equally? How, exactly, does that hurt consumers?

Another day, another Net Neutrality story, this time concerning what the people have to think. As if anyone cares what we mere citizens have to say about all of this! A new Rasmussen Reports poll says that 21 percent of “likely U.S. voters” support Net Neutrality. Unfortunately, the poll’s wording makes Net Neutrality seem far more sinister than it actually is. As we all know, Net Neutrality, as it’s currently on the books, is pretty toothless, so I don’t see why “likely U.S. voters” would be so upset about it.

Here’s the wording. Imagine Rush Limbaugh reading it for proper effect:

1. How closely have you followed stories about Internet neutrality issues?
2. Should the Federal Communications Commission regulate the Internet like it does radio and television?
3. What is the best way to protect those who use the Internet—more government regulation or more free market competition?

A big LOL at question three. I mean, isn’t that a huge part of the problem, that there’s zero free market competition in many places? You don’t like the way your local ISP is handling your traffic, or the data packages you provide? Too bad, chico, because Big Teleco ISP is the only game in town!

And “regulate the Internet like it does radio and television”? Oh, like how the FCC allowed Clear Channel and CBS to gobble up every single radio station in the country? Or perhaps this is an allusion to the so-called Fairness Doctrine, which is pretty lame as I understand it. Not a fan.

Let’s also not forget that the poll only asked “likely U.S. voters,” and on December 26—a Sunday, and the day after Christmas. What normal person wants to answers some lame political poll then? I’d answer the phone with, “No, not interested, I’m playing Civilization V.” That means my opinion isn’t counted, even though I vote all the time. I am outraged. (Not really.)

In short, please don’t put too much stock into headlines you see today blaring, “PUBLIC DECRIES GOVERNMENT TAKEOVER OF INTERNET.” Hopefully by now you know that simply isn’t the case, if only because Net Neutrality, as it’s on the books, is pretty weaksauce.

With Theopeninter.net, web designer Michael Ciarlo has given you the holiday gift of being able to explain to the less web savvy members of your friends and family what net neutrality means (simply, and with visuals) and why exactly laymen should care about the FCC’s recent attempts to create “enforcable” Internet regulations.

Ciarlo describes the inspiration behind the site as stemming from a conceptual expansion of already existing situations where ISPs exert control over access.

“In November my console was updated to include ESPN3. To my surprise, much of the content was unavailable, despite being an XBOX Live customer with a broadband Internet connection. As it turns out, Time Warner Cable had disabled much of my access to this feature, on a device purchased independently of their services, because I didn’t pay for a cable package that included ESPN3. I was angered and frustrated that my ISP had blocked features of a product they did not sell or control.”

Granted there’s a lot more complexity surrounding the issue than “All ISPs are inherently evil and want to charge you for Skype” Theopeninter.net does, as Reddit commenter lolinyerface (yeah I know) put it, “The job of showing how things we get for free now, could one day be per item additional cost.”

Explains Ciarlo:

“I created TheOpenInter.net to depict a time in the future when ISPs control the Internet and all data is not downloaded equally. While creating the site’s design, I had the idea to bundle Netflix and Hulu as a package ISPs required you to buy. Halfway through development, I questioned the reality of my portrayal. Was I too far off-base?

Then to my surprise a Wired article titled “Mobile Carriers Dream of Charging per Page” showed almost the exact same scenario. While there is no documentation within the article to prove wireless carriers have any current plans to implement a similar pricing structure, the fact that evidence exists to suggest its consideration is frightening.”

The ghost of Christmas future, indeed.

Barely one day after the FCC passed a form of Net Neutrality, pleasing no one in the process, opponents have already committed themselves to repealing the “hostile takeover.” Sen. Jim DeMint, from South Carolina, has come out against the new rules, saying that “unelected bureaucrats rammed through an Internet takeover.” I suppose we should ignore the fact that AT&T, no friend of Net Neutrality, has been his third biggest campaign contributor over the past five years. But that’s just a coincidence.

DeMint goes on.

To keep the Internet economy thriving, this decision must be reversed. Regulatory reform will be a top priority for Republicans in the next Congress, and I intend to prevent the FCC or any government agency from unilaterally burdening our recovering economy with baseless regulation.

He’s so dedicated to this cause that he’s decided to refer to the FCC as the “Fabricating a Crisis Commission.”

Well played, Senator.

To his credit, DeMint may have a point buried underneath all that silly rhetoric, and it has to down with how the FCC enacted Net Neutrality in the first place. The New York University School of Law’s Institute for Policy Integrity bemoaned [PDF] the fact that the FCC passed Net Neutrality not by “[invoking] it more robust regulating powers,” but that it “based the new rule on legal authority that was called into serious doubt by court decision earlier this year making the long term prospects for the rule quite poor.”

If there’s to be a proper legal challenge to this form of Net Neutrality—and that might not be such a bad thing, given how flimsy the new rules are—it’s to come from that angle, that the FCC didn’t have the authority to pass any sort of Net Neutrality in the first place.

This is what happens when you try to please everyone.

With a 3 to 2 vote earlier today, the FCC has put its stamp of approval on Net Neutrality. The funny thing is that it seems both “sides” of the debate are upset. On one hand you’ve got the detractors who say it’s nothing but an “unholy scheme” designed to bring the Internet under the unnecessary (if not unlawful) control of the government. A bit dramatic, but OK. On the other hand you’ve got Net Neutrality proponents who say the new rules don’t go far enough to protect consumers from abuse.

We’re already familiar with what the detractors have to say: this is a government takeover, and we’re all one step closer to a Hugo Chavez-style takeover over the media. Or, less hysterically, the Internet isn’t “broken,” so why should the FCC—which may not even have the legal authority for evoke Net Neutrality—waste time trying to “fix” it?

Proponents of Net Neutrality are just as disappointed with the ruling. The Free Press, a “national, nonpartisan organization working to reform the media,” says that this is nothing less than a “squandered opportunity.”

Says the origination’s managing director, Craig Aaron:

We are deeply disappointed that the chairman chose to ignore the overwhelming public support for real Net Neutrality, instead moving forward with industry-written rules that will for the first time in Internet history allow discrimination online. This proceeding was a squandered opportunity to enact clear, meaningful rules to safeguard the Internet’s level playing field and protect consumers.

The new rules are riddled with loopholes, evidence that the chairman sought approval from AT&T instead of listening to the millions of Americans who asked for real Net Neutrality. These rules don’t do enough to stop the phone and cable companies from dividing the Internet into fast and slow lanes, and they fail to protect wireless users from discrimination. No longer can you get to the same Internet via your mobile device as you can via your laptop. The rules pave the way for AT&T to block your access to third-party applications and to require you to use its own preferred applications.

Harsh words, to be sure.

The New York University School of Law’s Institute for Policy Integrity [PDF]has also expressed disappointment, calling the new rules “tepid,” and has focused on one specific aspect of the decision: managed services. What in the nine hecks are “managed services”?

The new but not-yet-properly-defined “managed service” exemption may amount to the first step down a slippery slope of non-neutral Internet service. The exemption should be carefully tailored to address only a small number of special categories of applications that cannot operate under the existing open framework.

Ars Technica discussed “managed services” at length a few days ago. In short, a “managed service” could be construed to mean things like VPNs, VoIP, and video streaming. The problem with Net Neutrality, as it was just passed, pays no attention to these services whatsoever. It lets companies do whatever they want with last-mile traffic. If your local cable company, which just so happens to be the only Internet Service Provider in the area, decides to charge, I don’t know, $5 per month for the ability to make VoIP call on its network, well, it can! (You’re free, of course, to sign up for the cable company’s “triple play,” which includes free VoIP from its preferred provider.)

In other words, there really aren’t any winners today. To some people, we’re some step closer to having Big Brother punch us in the face every morning, and to others the FCC has just wasted a whole bunch of time and energy doing a whole lot of nothing.

Pretty awesome.

Reading Drudge and the Wall Street Journal this morning had me concerned that Julius Genachowski, the FCC chairman, was going to smash my modem into tiny pieces with a +2 mace in the name of flexing regulatory muscle. Hardly. It’s true that the FCC will vote tomorrow whether or not to implement some sort of Net Neutrality regime, but considering that it’s already stated what it means to accomplish with the vote, I don’t understand why folks are so upset. But, I’m willing to listen.

“The FCC’s Threat To Internet Freedom,” written by an FCC commissioner, Robert M. McDowell, appears in today’s Wall Street Journal, but it doesn’t say anything new. The premise seems to be a defense of the argument “if it ain’t broke, don’t fix it.”

The story goes that the Internet has evolved splendidly so far, and it’s done so more or less independently of government intervention. All sorts of new and exciting services have popped up, from Facebook to Netflix to World of Warcraft to Rdio to… take your pick. Why would we want to endanger the Internet, and all of that innovation, by getting the government involved?

It’s a fine enough argument, but only if you ignore a few things (which the op-ed does, of course). Who can forget, only a few years ago, when Comcast decided to throttle its users’ traffic without informing them? That sure was nice of them: interfering with your data without telling you how or why. The FCC’s new regulations would require ISPs to spell out the hows and whys traffic shaping. That alone is a win for consumers.

(Keep in mind that I don’t have a problem if an ISP wants to charge more for more bandwidth. Why you should pay the same $50 per month when you’re streaming gigabytes of video data when your neighbor only uses his $50 connection to shop online or post funny photos to his Facebook? I also recognize that bandwidth isn’t water, and there’s no reason why it should be treated as a scarce resource, but I’ll meet the ISPs halfway here. There’s nothing wrong with a little give-and-take.)

There was also the recent Comcast-Netflix scare that illustrated the danger of a world without Net Neutrality (even if it amounted to very little in the end.) “Want to use Service A on our network? Sure, you can, but it’ll cost you. Meanwhile, can we interest you in Service B instead? It’s free because they’re giving us giant sacks of money in exchange for preferred access to our subscribers.”

That said, I can understand people’s apprehension with getting the government involved here. The Internet, by and large, has evolved splendidly without government intervention (putting aside things like the DMCA and the Can Spam act, which amount to government interference but not the “objectionable” kind of interference, I guess—interference is only interference when it’s inconvenient), so why would we want to change that now?

In any event, the scare tactics used by those who are (for whatever reason) against Net Neutrality don’t really do their cause any favors. If you want to explain why you think Net Neutrality isn’t all it’s cracked up to be, that’s fine. In fact, it’s encouraged: there’s nothing wrong with people with differing viewpoints communicating to each other. But let’s actually have a debate, and not reduce ourselves to silly puns like “Julius Seizure.” What purpose does that serve? I’m just not sure we want to debate major policy shifts via childish name-calling.

Although no one is currently considering implementing these features, this has been a long-time dream for many carriers and is probably the first step in the slow erosion of user’s rights.

Here is the whole deck:

Final Slide Deck http://d1.scribdassets.com/ScribdViewer.swf?document_id=45686666&access_key=key-1fqj6a4efnh47h22x4k5&page=1&viewMode=slideshow

Allot and Openet use multiple methods to figure out what you’re looking at including “methods like heuristic analysis, behavioral and historical analysis, deep packet inspection, and a number of other techniques.”

What’s key is that we have the best application identification available on the market, which means that even applications that are encrypted or use other methods to evade detection will be correctly identified and classified… We essentially feed this real-time information about traffic and application usage into the policy and charging system. Each subscriber has a particular service plan that they sign up for, and they’re as generic or as personalized as the operator wants.

In short, this is the ultimate example for pro-net neutrality legislation. The entire service stinks to high heaven and the key words in that quote above (“as personalized as the operator wants”) personifies the problem with an anti-NN stance: once the operators decide what they want, you’re out in the cold. Maybe the operator doesn’t want to deal with Wikileaks – bam, no support. Maybe the operator wants to support Bing for commercial purposes – bang, no Google. It’s a slippery slope and we’re already at the top of the slide.

The problem with net neutrality is that it “feels” too hippy dippy, a movement led by noble activists who support freedom of speech, open bits, and all kinds of other nerd granola. This clouds the real issue: that carriers, operators, and backbones want to make more money out of something that essentially costs them nothing to carry. The infrastructure obviously needs support, but this is more about shareholders than supporting a free and untethered Internet. If we stay silent on this, the Internet will change.

via Eng

Editor’s note: Guest author John Borthwick is the CEO and founder of betaworks and in a previous life was a senior strategist for Time Warner and a witness in the Microsoft antitrust case.

Access to fast, affordable and open broadband, for users and developers alike is, I believe, the single most important driver of innovation in our business. The FCC will likely vote next week on a framework for net neutrality—we got aspects of this wrong ten years ago, we can’t afford to be wrong again. For the reasons I outline below, we are at an important juncture in the evolution of how we connect to the Internet and how services are delivered on top of the platform. The lack of basic “rules of the road” for what network providers and others can and can’t do is starting to hamper innovation and growth. The proposals aren’t perfect but now is the time for the FCC to act.

Brad Burnham stopped by our office earlier this week to talk about his proposal for the future of net neutrality. The FCC has circulated a draft of a set of rules about neutrality that the Commission will likely vote on this week. Though the rules are not public, Chairman Genachowski outlined their substance last week. Through a combination of the Chairman’s talk, the Waxman Proposal, and the Google/Verizon proposal, one can derive the substance of the issue and understand its opportunities and risks. I strongly support much of what the Chairman has proposed and I support the clarifications that Burnham outlines. But before further discussing this point, I have to ask, why does this matter now? Over the past few years there has been a lot of discussion, a lot of promises, and some proposals with regard to net neutrality.  Here are three reasons why this matters now:

1. The Internet and how we build things on the network is undergoing meaningful change as we transition to broadband and wireless access.

Network providers are making significant capital commitments that will shape access to networks in coming years. Despite this, the US is behind in both broadband and wireless connectivity. Only 65% of American households have broadband access, compared to 90% of households in South Korea. It is important to note that not all access is created equal. A study from earlier this year puts the US in 18th place with an average of 3.8 Mbps downstream compared to an average of 14.6Mbps in South Korea. The US is now 22nd in terms of downstream broadband speed, behind Latvia and the Czech Republic. The story is the same on a price per megabit basis: in the US, we pay $40 per month for an average of 3.9Mbps, which can be compared to a $45 per month fee that includes 20-30Mbps connections in France(plus VoIP service and HDTV + DVR to boot).

As I said at the outset, access to fast, affordable broadband for users and developers is, I believe, the single most important driver of innovation in our market. We got this wrong ten years ago—we don’t have a competitive market for broadband today, access is inconsistent, prices are high and speeds are often anemic—and we can’t afford to be wrong again.   The structural separation approach that the Europeans took a decade ago yielded cheap, fast access in their market. I believe this access has been the most significant factor in the advancement of European Internet innovation. Despite this, the European approach is now reaching its limits. The transition to wireless Internet access provides an opportunity; and as the network becomes more diverse, the need for common technical standards becomes essential. An uneven experience across various platforms will fragment innovation and promote gatekeepers’ ability to tax applications.  Match this situation with the embedded conflicts of interest in the delivery of video over DOCIS, or wireless vs. over-the-top IPTV, and you get a sense of the network complexities at hand. As Chairman Genachowski pointed out, we need “rules of the road” and now is the time to act.

2. Most of the innovation that has taken place online over the past 15 years was born out of a handful of architectural decisions. Two of these decisions are now being challenged.

Non-discriminatory pricing of bits and the clear definition of layers (i.e. the logical separation of conduit and content) that make up the Internet stack are two of the key architectural foundations of the network. The fact that bits containing applications, images, text or videos are handled in the same manner is central to how the Internet works. Network providers can shape or manage traffic on an aggregate, best-effort basis but identifying a single application or any content in an application or page will change the way the network is used. Specifically, it will hamper innovation by end-users such as individuals, developers and new or existing companies. Similarly, the layers are building blocks that are vital to how we develop and build Internet companies. This goes back to seminal pieces of Internet literature like the rise of the stupid network. I agree that, in the short term, tightly coupled systems can provide more efficient means to drive end-to-end innovation when you know precisely what you want to build. But I fundamentally believe that the essence of innovation is that you don’t usually know exactly what you want to build.

Innovators aim to solve problems—they start in one place and then they iterate. All too often real innovation is simply stumbled upon. Ideas and companies evolve (or pivot, as we now call it) as they better understand the problem they are seeking to solve. The Internet has demonstrated time and time again that loosely coupled systems and edge-based innovation is what drives the kind of massive change we have seen over the past two decades. This freedom to create “on the edge”, and to evolve ideas, is what gets me up in the morning and keeps me up late at night.

Like all good architecture, structural principles are remarkably resilient to change and scale. There have been continual challenges to these principles over the past few decades but this has all been part of the persistent tension that exists in a network between centralization and decentralization. Today, given our current transition to wireless and broadband access, the challenges faced are more fundamental as network providers attempt to change these building blocks as preconditions to future investment. The conflation of access (and control of access) with control of the stack of the open Internet is wrong.

3. Edge-based innovation has been the driver of change and creativity online, yet the edge has no single representative.

The edge-based innovation I talk of is predicated on access to a handful of things and the persistent tension between centralization and decentralization is a hallmark of a healthy web, evident in debates all the way back to Napster, CompuServe and AOL and, more recently, Facebook and Wikileaks. We have many native Internet companies relative to ten years ago. Though these native Internet companies come from the edge, no single company represents the edge.  Moreover, as companies scale, they become increasingly misaligned with the edge. Google, Amazon, Facebook, eBay, and Yahoo, for example, all came from edge-based innovation but no longer represent the edge. Despite intentions to the contrary, there is a natural evolutionary path through which a large company becomes less likely to let edge-based innovations flourish and more likely to preserve the status quo.  There is currently an over-representation of the center in Washington DC and the edge needs a louder voice.  That’s up to us and, most likely, also up to you.

So what to do? As Burnham outlines, there are a handful of areas that merit attention. The key points are:

Application discrimination and specialized services

Burnham advocates Barbara van Schewick’s approach to “all application-specific discrimination”. I believe this approach can work because it works today. It is hard to understand where to draw lines here but we know what we think when a network provider discriminates against a specific application or specific content.  We know it when we see it.   Schewick proposes a generalized rule to ensure that this discrimination does not happen. If you doubt this approach, read the Zedevia letter as evidence that companies hesitate to invest without clarity—companies need clearly drawn lines.  How much edge-based telephony (i.e. voice-based communication) innovation have you seen on the iPhone?  Not a lot.   Today—the list of issues and examples of discrimination is starting to grow.  This is happening as the adoption of over the top services (IPTV etc.) places pressure on the cable companies’ video based revenues or the wireless companies’ voice and data revenues. Application-agnostic network management with a definition of an application should include apps, sites and web services.  To the extent that there are specialized services that network providers want to put in market they should do that—but they need to be distinguished from the open internet.

Wireless rules

The arguments that wireless should be treated separately from wireline are in my mind specious at best. Despite the fact that wireless network providers manage the network differently than wireline providers (given a need to share a limited resource among varying densities of users), wireless providers, like wireline providers, should not have the ability to discriminate against specific content, sites or applications. 

Furthermore application developers need uniformity of standards at the lower levels of the stack to be able to build products and services in a seamless manner at higher levels of the stack.  For example, we are currently building a social reading service that will ship as an iPad application. It includes an interface that distills content streams that should be of interest to you, the reader.  The content is then displayed inline, regardless of whether it is text, images or videos. Imagine you use this iPad application at home on your home network.  All images, text, and videos are displayed and usable. Now imagine that you take your iPad to the park and fire up the same application through a 3G or 4G wireless connection and all of a sudden the videos won’t work? Not that they are slow—they just wont work given the plan you are on.    

Increasingly, users expect experiences to be the same regardless of connection type. Devices like the iPad are designed to be used in many environments; the idea that connectivity should dictate experience is becoming antiquated.   Distinctions that network providers have around wireline and wireless should be limited to the physical layer of the stack. People who are creating companies should not have to build for two different networks. Commissioner Clyburn got this right when she recently said: “We should ensure that, while there are two kinds of networks, we don’t cause the development of two kinds of Internet worlds.” She continues, “Some have raised the issue that different rules are needed in the wireless arena because it is more competitive than the wired world. But I believe we cannot ignore the fact that there are many features of the wireless market that create high switching costs, such as exorbitant ETFs and a lack of handset compatibility across carriers.” Wireless access is the future for the majority of internet access—carving it out of an agreement, or limiting the rules to Internet websites (vs. websites, applications, or services as Waxman proposed) would, I believe, be a mistake.

Since my work years ago on the Microsoft Antitrust trial, I have been an adamant believer in minimizing the role of government as it relates to technology policy. Nonetheless, if government has a role in technology policy it is right here. Our business at betaworks is predicated on a thriving market for early-stage tech innovation at the content and application layer. Most of the businesses we have built or funded would not exist without the assumed freedoms that formed the platform we call the Internet.

We now have the same opportunity that we faced a decade ago. We can support the FCC in putting in place “rules of the road” to enforce basic tenants or we can continue down a path that de-facto leaves these decisions in the hands of large companies with limited oversight, no transparency, and no means of enforcement.   The pace of innovation today is staggering yet there are walled gardens that are becoming increasingly difficult for small startups to surmount.  I hope the FCC and the Chairman will take a bold step forward and that this results in something we can work with to scale the next decade of innovation in this sector.

Here is my bundle of reading on the subject: http://bit.ly/Neutrality_readings (brought to you courtesy of a nice bit of edge based innovation!)

If you agree that net neutrality is worth fighting for, do something about it, starting with making some noise.

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The FCC has just released its latest report on the sate of broadband in the US of A (PDF alert), and the results are… less than encouraging, and for a number of reasons. The agency found that around two-thirds of Americans’ broadband connections don’t actually qualify as broadband under its definition. (Broadband to the FCC is 4 mbps down/1 mbps up.) What’s sorta odd is that this isn’t a result of the lack of infrastructure or anything, but a result of people choosing low speed plans.

The data used in the study is accurate as of December 31, 2009, so any changes between then and now won’t show up till the next report.

There’s a few things going on here. For one, the Free Press, sorta of a watchdog group, says (PDF alert) the FCC really ought to be measuring things like broadband availability and not broadband subscription. The argument is that it gives a better idea of the state of broadband when you measure actual availability rather than what people happen to subscribe to.

But there’s value in knowing that—subscription rates—as well.

I don’t have to tell you guys, the blog-reading tech enthusiasts, that bandwidth-heavy services have really taken off this year. Streaming Netflix is practically embedded in refrigerators at this point, and music services like Rdio and Pandora (and Spotify, but that’s Europe-only right now) are becoming more and more “normal,” if that makes any sense. Then you look at the number of people playing online video games with Xbox Live or PSN, to say nothing of new services like OnLive…

The point is, we’re reaching the point where there’s actually a legitimate use for a fast broadband connection. I mean, I pay for a 101 mbps down/15 mbps u connection, but it’s been nearly impossible to saturate with legitimate traffic (or otherwise). So if we have an idea of what broadband subscription was like in the past, we can then see how people moved to faster plans as the aforementioned services became more commonplace.

Now we just have to ensure that ISPs don’t start playing favorites when it comes to actually delivering all that data.

So can the center fight back against this unholy alliance of radical netizens and Tea Party libertarians that seem intent on crushing any kind of network neutrality compromise?

One of the feistiest voices of this broad center – which now incorporates most of Silicon Valley, many of the larger ISPs and media companies, the Obama administration and prominent technology investors like Ron Conway – is Gigi Sohn, cofounder and CEO of Public Knowledge. While she is certainly closer to the radicals of Free Press than to the radicals in the Tea Party, what distinguishes Sohn – as I found when I skyped her on Monday – is her willingness to try to work with Genachowski to sculpt a compromise to this hideously complex issue.

But, according to author and legal scholar Larry Downes, whom I also skyped on Monday, this center probably won’t hold. Downes believes it’s “almost a certainty” that the dispute is now headed to the law courts for two to three years, where the only real beneficiaries will be hardline conservatives and radicals, and, surprise surprise, the high priced lawyers hired by either side to drag out this critically important issue forever.

If you missed the part one of this special two part series about the latest twists and turns in the ongoing network neutrality saga, you can view interviews with Andy Kessler and Richard Bennett here.

Sohn on compromise

Downes on why compromise won’t work

This certainly changes things. You’ll recall that the Internet flipped out the other day when it emerged that Netflix‘s traffic carrier, Level 3, said that Comcast was taking advantage of its position as one of the nation’s largest ISPs by demanding more coin to pass on Netflix traffic to its customers. It is, in fact, largely boring tosh, but it speaks to something we’ve been talking about for some time. That is, of course, Net Neutrality, which I tend to capitalize for some reason, almost imbuing it with a greater sense of importance. No matter, for nor Comcast has told its side of the story, and things are quite different in its recollection of events.

Comcast, feeling some FCC heat, says that this particular incident is truly nothing more than a plain ol’ commercial dispute. This isn’t Comcast playing the heel, tap-dancing all over the principles of Net Neutrality. In fact, you might even say that Comcast is the victim here.

I know the idea of Comcast being any sort of victim won’t sit well with many folks on the Internet—Comcast’s past behavior certainly won’t be forgotten for some time yet—but it’s important to at least listen to what it has to say before calling for whatever.

Here’s Comcast, verbatim:

Level 3 has low-balled its way into a new business deal that will significantly increase the amount of Level 3′s traffic Comcast would carry. and suddenly wants to seriously disrupt settled economics of Internet traffic to meet its new business plan. Its position is not based on any principles of fair play on the Internet, but instead is merely the result of its rash bid to carry Netflix traffic at radically low rates, based on the flawed assumption that it could use its Tier 1 Internet backbone status to cram its CDN traffic onto others’ networks on a settlement-free basis.

In other words, Level 3 won Netflix’s business by promising it a sweetheart deal that it was in no position to deliver. Then it turns to Comcast and says, “Oh hai. We need you to deliver a megaton more traffic than we’ve ever asked before. Please comply as soon as possible. You don’t want to be accused of being anti-Net Neutrality, do you?”

Comcast, not wanting to look like a jerk (particularly when it’s trying to give Washington regulators the impression that it’s a force for good—NBC Universal won’t come easily), tried its best to accommodate Level 3′s request (Comcast “was able to scramble and provide Level 3 with six ports (at no charge) that were, by chance, available and not budgeted and forecasted for Comcast’s wholesale commercial customers”), even though it had no contractual reason to do so.

All of this means—again, if Comcast is being truthful here—that Comcast is not quite the boogeyman that it’s so often portrayed as.

Which brings us back to Net Neutrality. Perhaps Level 3 thought it could ride the wave of popular support for Net Neutrality—I’m still not convinced that Net Neutrality is “controversial” in any sense of the word—by invoking memories of Comcast’s past behavior. Here’s Netflix, one of the new darlings of the Internet, showing us just how much Streaming Is The Future, being bullied by big bad Comcast. (Let’s ignore the fact that all of this bandwidth has to come from somewhere—you surely can’t expect to pay the same amount ore month for Internet access as someone who only uses their connection to check Facebook when you’re streaming Netflix movies all day long.) Only that wasn’t the case at all.

Again, maybe. This all assumes Comcast isn’t leaving out certain details in order to look good.

All of this, just so you can watch Eat, Pray, Love on demand.

The FCC continues to push for Net Neutrality, with an actual vote set for later this month. The Commission’s chair, Julius Genachowski, is set to give a speech on the subject today, but luckily it’s already been posted online. The reason for all of this? “The animating force behind all of these efforts is a shared appreciation for the Internet’s wondrous contributions to our economy and our way of life.” Or are you against the Internet’s “contributions to our economy and our way of life”?

As I read the speech, there’s really nothing too controversial about it. All the FCC is trying to do is to ensure that the Internet, in the words of President Obama, remains “open and free.”

Surely you don’t want the Internet to be “closed and non-free,” right?

Or do you simply not care? My guess is that the average person walking down Main Street doesn’t care one way or the other. That is, until they try to use Netflix and find out that it doesn’t work. That’s when people will care: when they’re directly inconvenienced.

An open and free Internet, says Genachowski, is “the American dream at work.”

Would a site like Facebook taken off if Zuckerberg & Co. not had access, in their Harvard dorms, to a free and open Internet? I doubt it.

So, how to ensure this openness?

If the FCC gets its way, it will establish, for the first time ever, “open Internet rules.”

It goes a little something like this:

• “[C]onsumers and innovators have a right to know basic information about broadband service, like how networks are being managed.” So, if Comcast decides to throttle your BitTorrent traffic for whatever reason, you have a right to know.

• “[C]onsumers and innovators have a right to send and receive lawful Internet traffic—to go where they want and say what they want online, and to use the devices of their choice.” No ISP should be able to tell you that they’re not going to carry this or that traffic—see: Netflix and Comcast— for whatever made-up reason.

• “[C]consumers and innovators have a right to a level playing field. No central authority, public or private, should have the power to pick which ideas or companies win or lose on the Internet; that’s the role of the market and the marketplace of ideas.”

Genachowski then adds that ISPs should be allowed to manage their networks to, in part, “address the effects of congestion.” And that’s fine, provided the ISPs inform their users what they’re doing, and why. Maybe an ISP wants to limit download speed between the hours of 6pm and midnight in order to ensure that everyone in an area can actually access the Internet?

All of this seems eminently reasonable, but I’m willing to entrain differing points of view.

*Now* do you people understand why Net Neutrality isn’t merely some thing that Slashdot-dwelling sysadmins argue about during lunchtime? Surely you’ve heard by now that Comcast, one of the largest Internet Service Providers in the U.S., has been fiddling with Netflix traffic? But no, Net Neutrality isn’t worth defending, right?

The story goes that Level 3 Communications, which handles Netflix’s Internet traffic, says that, all of a sudden, Comcast started demanding more money to accept said traffic. Comcast says it’s merely a commercial dispute—if you want us to pass this traffic over to our customers, you’ll have to hand over X more dollars than we used to charge&mash;and that it has nothing to do with Net Neutrality.

Which, of course, is syncretic nonsense.

A sort of, “We’re threatening to use our position as a major ISP to extract more RENTS~! in order to carry your traffic. This has nothing to do with Net Neutrality, honest.”

Hmm.

Level 3 said as much in a statement yesterday:

With this action, Comcast demonstrates the risk of a ‘closed’ Internet, where a retail broadband Internet access provider decides whether and how their subscribers interact with content.

The problem is that there really doesn’t seem to be an easy way out of this mess. Clearly streaming media is taking over the world, but there’s one problem: bandwidth isn’t free, and that’s Comcast’s biggest complaint. If you want Comcast to carry this or that stream, then you can’t expect Comcast to do so at a loss, right?

Granted, I’ve no idea how much it costs Comcast to run and maintain a broadband network, but I recognize that they’re in business to make money.

If nothing else hopefully more people will now recognize what’s at stake: among other things, your ability to stream the content of your choosing.

People only care about things when it happens in their backyard, right? Well here you go.

In general Wu — who gets credit for coming up with the term “Net Neutrality” — has a really important mission whether you agree with him or not: Raising alarm bells that the Internet, like every mass communication medium that has come before, could one day become strangled and controlled by a handful of companies.

From what I’ve read and from our conversation on and off camera last Thursday, Wu seems to stop short of saying what has happened before on radio, telegram and television will happen with the Internet, saying it could happen. The question, he says, is whether there is something inherently different about the Internet from a technology standpoint that keeps it inevitably open. I think what keeps it from happening is something else: The community around the Internet and the age of modern entrepreneurship in which we live.

Unless the FCC totally screws up on Net Neutrality, big Internet companies just don’t have the luxury of shutting upstart rivals out. You want to be cynical and say money drives policy in Washington? Fine. There is more money on the side of the Internet being open than the Internet being closed.

Wu argued that there is nothing different about entrepreneurship today in Silicon Valley than there was back in the early days of the telephone or the radio, and– channeling my inner James Carville– I argued why he was wrong. Here’s the gist of my argument, which we didn’t have to time really get into on camera:

1. Invention versus iteration. There was probably more raw invention in early waves of communications industries because a lot of Internet companies have been able to stand on the shoulders of giants. Try inventing the consumer Web without copper lines going to homes and businesses and try inventing all of that without, say, electricity. As the Web gets longer in the tooth, there’s less sheer OH-MY-GOD! innovation and more iteration. Facebook was a version of social media that worked, not the first social media site; same with Google and search. And unlike a lot of the other waves Wu talks about, at this point the consumer Internet is almost purely software development, not hardware and manufacturing; it’s mostly design and user experience not hardcore circuitry and science.

This may sound like a knock, but when it comes to commercialization it’s not. The more revolutionary the invention, the harder it is to fund it, manufacture it, commercialize it and get broad distribution for it. The lower the barrier for disruption, the more it occurs and the fewer opportunities large incumbents have to keep markets closed by, say, sucking up manufacturing capacity or raw materials. The assets for the web are smart coders and venture cash. The former tends to flow out of big companies seeking new challenges and new stock options. There’s no shortage of the latter– in fact there’s an unhealthy glut of it. When new upstarts are awash in an industry’s natural resources, it’s hard for incumbents to keep them out.

2. Lines of credit versus venture capital. Wu argues that modern venture capital isn’t a differentiator because there were ways of financing companies in earlier waves of technology, like lines of credit. Come on. Really? There is a world of difference between an entrepreneur able to put up enough personal collateral to secure a line of credit and an industry where thousands of VCs have $20 billion-plus burning a hole in their pocket looking for high-risk, no revenue opportunities in which to invest. By definition it opens the concept of being an entrepreneur up to huge new swaths of the global population. That means at a minimum that more companies are started, and that means there’s more opportunity to start the next Google or Facebook. The barrier of financing for a smart idea is all but eliminated.

How different would, say, early Hollywood have been if any kid with an idea for a movie studio had millions of dollars in funding? It creates huge, constant pressure on incumbents to keep users happy and — as mentioned earlier– incentivize the best employees to stay because suddenly jobs at startups not only offer stock options but they have enough cash to pay competitive salaries. And if one hot company gets traction it means hundreds more are started the next day by VCs who want “their YouTube,” “their Foursquare,” or “their Groupon.” This much money with the sole purpose of backing new companies starts to become a game of odds. Every VC would have to be utterly inept not to accidentally back the next great Web mogul.

There is a fundamental difference in how banks and VCs make money and what keeps them in business. Lenders want companies to do well enough to repay debt, and then take bigger loans to continue building their business. Venture capitalists want continual waves of industry disruption. When you have power and money behind breaking not protecting big companies, it’s a different scenario. Building a huge company is never easy, but entrepreneurs at the center of the Web are hardly the Davids going up against Goliaths that entrepreneurs were in previous information ages of the past.

3. The culture of pioneers versus the culture of young-eating-the-old. Wu’s argument is that when a technology is new, aggressive entrepreneurs flood in, many go out of business and a few survive to become the big winners. He is right that there is nothing unique about that cycle generally. But the uniqueness of Silicon Valley is that it no longer relies on returns from the pioneers of huge new industries, it relies on the young continually eating the old throughout an industry’s life cycle. Witness the lack of mourning when a former giant falls on hard times. Witness the lack of asking for bailout dollars. Witness the constant churning of talent, press and attention towards new things. The hype cycle is a bad thing in a lot of ways for Silicon Valley. But the one good thing that it does is continually champion the new over the old.

Overall, Wu and I agree more than we disagree. If the future of the Internet were up to Google, Apple, AT&T and the federal government, I’d be concerned too. But $20 billion a year in venture capital and thousands of people starting companies all over the world every year aren’t going to cede anyone that right. The biggest evidence of that is Facebook. If the Internet were copying the trajectory he describes, we’d have our winners and they’d be AOL, Yahoo, Amazon, eBay and Google– end of story. I doubt AOL, Yahoo or eBay would argue they are protected oligarchs, and Amazon would be in the same state had the company not dramatically pivoted into new areas. Google dominates, in part, because it is the youngest of the bunch and iterated in business model and product after watching the older search and portal companies. And Google is now feeling the heat from companies like Facebook and Twitter. Mobile Web may prove to be another matter, but there are just no signs to support that the early pioneers of the Web have an advantage that makes them immune to younger challengers.

Indeed in a lot of verticals, late 1990s companies have already tried to flex these muscles Wu fears, and they’ve largely failed. Look at travel where online travel agents who had protected inventory fought sites like Kayak who wanted to spider their travel listings. The big portals tried to do this pre-Google, de-emphasizing the search box in favor of people staying within their walled virtual department store. Google disrupted that by making the idea of sending people away from your site more lucrative. Google got very little time to bask in that. Just a few years later, one of Google’s biggest challenges is trying to find ways to match the dramatic rise of Facebook, when it comes to keeping their key employees and finding their own answer to social and casual games.

Consider the industry that has done the best job using a closed system and high-paid lobbyists to kill startups: Online music. VCs funding nearly any online music company in the last decade could have just made out the investment checks out directly to the labels, and the result would have been much the same. These companies were almost all bled dry with royalties, and then killed. One of the only reasons Pandora has survived is because it catalyzed its loyal users to break congressional fax machines with complaints about proposed legislation that would put the company out of business. But even in this industry where protectionism has killed so many great startups, the labels haven’t “won” because they are still slowly dying. They continue to lose money, because of users like Pandora’s who demand they work with new entrants, rampant and uncontrollable piracy and VCs who continue to fund new music startups like Spotify despite a graveyard of failures. It’s not just the power of the Internet– it’s a powerful community of hackers, entrepreneurs and VCs who send wave after wave of challenges to an industry that they believe should be more open.

Wu says somewhat dismissively in the clip below that everyone always thinks there’s something so different about their own time. While it’s good to sound potential alarm bells, I’d argue that believing that industries and consumers never change is just as flawed of an outlook.

There’s a clip of the show below, go here to hear Wu talk specifically about the state of Net Neutrality.

A report in the Financial Times suggests that Net Neutrality may, once again, be on the docket. The FCC is looking to have everything wrapped up as early as its December 15 meeting. Whether or not that actual happens—there have been several false starts, of course—who knows?

I’m not even to going explain Net Neutrality again, but what’s most interesting with this latest report is that the major ISPs really aren’t against the idea. If the ISPs are fine with Net Neutrality, then where’s the controversy?

(Comcast is particularly happy since the new rules would be in effect for all the nation’s ISPs and not just Comcast. Comcast needs to get on the government’s good side in order for its merger with NBC Universal to go through.)

The FCC is particularly concerned that ISPs will play favorites when it comes to all these new online video streaming services, like Hulu and Roku. If your ISP seriously degrades the quality of Service A, then you’re pretty much forced to go with Service B, which, conveniently enough, pays $X-Amount to the ISP for the rights to have MEGA QUALITY.

So, I guess we’ll find out in a few weeks what happens, particularly with the new dynamics in Congress.