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You have to hand it to the Dutch. On one hand, they crack down on their biggest tourist attraction – the ability of tourists to toke up legally in the famous cannabis cafes. That’s a big business over there and of course there are protests developing, mellow ones with lots of hungry people involved, to be sure.
On the other hand, they also did something truly radical. Earlier this week, the Dutch government gave final approval to one of the strongest open Internet laws in the world. Imagine that. A government guaranteeing through law that Internet connections can’t be manipulated by big telecom companies. The chances of that happening here are roughly equal to marijuana being legalized – not just offered through clinics, which could then be raided by law enforcement. (Of course, Europeans also do things like protect consumers from high rates and save people money. Perish the thought.)
1. Providers of public electronic communication networks which deliver internet access services and providers of internet access services do not hinder or slow down applications and services on the internet, unless and to the extent that the measure in question with which applications or services are being hindered or slowed down is necessary:
a. to minimize the effects of congestion, whereby equal types of traffic should be treated equally;
b. to preserve the integrity and security of the network and service of the provider in question or the terminal of the end user;
c. to restrict the transmission to an end user of unsolicited communication as referred to in Article 11.7, first paragraph, provided that the end user has given its prior consent;
d. to give effect to a legislative provision or court order.
There are two other parts to the law. One sets out the conditions under which a subscriber may be disconnected, and the third is characterized as an “anti-wiretapping” provision. For those who are constantly pushing for monitoring of consumer traffic to detect potential infringements, this part of the law would be, shall we say, totally unacceptable because it is based on providing customer privacy.
1. Notwithstanding the Dutch Penal Code and the provisions set out in or by way of this act, the provider of a public electronic communications network and the provider of a public electronic communications service ensure the confidentiality of the communication and the related data via their network or their services.
2. The provider of a public electronic communications network and the provider of a public electronic communications service shall refrain from the tapping, listening, or other kinds of interception or surveillance of communications via a public electronic communications network or public electronic communications service and the related traffic data, unless and to the extent that:
a. the subscriber in question has provided is explicit consent for these actions;
b. these actions are necessary to ensure the integrity and security of the networks and services of the provider in question;
c. these actions are necessary to ensure the transmission of information via the networks and services of the provider in question; or
d. these actions are necessary to comply with a legislative provision or a court order.
3. Prior to obtaining consent as referred to in paragraph 2, sub a, the provider provides the subscriber with the following information:
a. the type of data which is being tapped, listened, intercepted or surveilled;
b. the purposes for which the data are being tapped, listened, intercepted or surveilled;
c. the duration of the tapping, listening, intercepting or surveilling of the data.
Remember, these are rules for the country with the best Internet access rankings in Europe. According to Akamai’s State of the Net report for 4Q 2011, the Netherlands was 4th in world in highest average connection speed, (U.S. was 13th ) at 8.2 Mpbs – the highest in Europe. It was also 2nd in the world with the percentage of subscribers above 5 Mbps – 67% (U.S. is 12th) and 6th in percentage of customers above 2 mbps, 94% (U.S. is 35th, with 80%).
The Net Neutrality laws were enacted in a hyper-competitive, super-charged market in which cable has captured around 40 percent of the Internet-access business in an environment in which both telephone and cable companies have to unbundle their networks and offer service to competitors. It is, in short, the kind of network the U.S. could have had – robust, constant competition between and among copper, fiber and cable networks – but which U.S. regulators chose first to take apart during the Bush Administration and now to ignore generally in the Obama years.
It’s probably a little inconvenient and awkward (declasse?) to bring Net Neutrality back to the discussion after all these months. After all, it’s nothing more than intrusive government trying to tell business how companies should treat their customers, right? Wrong. Just as Dutch policymakers recognized the need for open networks in a regulatory structure far more competitive than ours, the requirements for an open, neutral network are even more important as U.S. policymakers stand idly by while the industry consolidates and grabs even more power.
Comcast’s questionable exemption of its data caps for the Xbox 360 is just the latest example, one that Netflix illustrated simply and starkly in a presentation to the Federal Communications Commission staff. Material is exempt from caps when the carrier generates it. It is not exempt when it comes from another source, like over-the-top programming or video like Comcast.
In recent weeks, there have been two technical analysis of Comcast’s video traffic. In one, Bryan Berg, founder/CTO at Mixed Media Labs, found after looking at the headers on packets: “The bottom line: Comcast built an Internet video streaming service. In certain cases, it exempted that service from bandwidth caps despite evidence that those streams are actually more expensive to deliver. It even appears that Comcast is prioritizing its own video streams over the other services.”
Similarly, Dan Rayburn, executive vp of StreamingMedia.com, got his own data and reached the same conclusion: “One of the points in that document [setting terms for the merger] says that, ‘Comcast shall not prioritize Defendants’ Video Programming or other content over other Persons’ Video Programming or other content.’ While Comcast agreed to these terms and said they would not prioritize their video traffic over someone like Netflix, that's exactly what they are doing.”
Eduardo Porter, economics columnist of the New York Times, lent his persuasive and authoritative voice to the discussion on May 8, when he published a strong piece in favor of a neutral Internet. He wrote: “Imagine a network of private highways that reserved a special lane for Fords to zip through, unencumbered by all the other brands of cars trundling along the clogged, shared lanes. Think of the prices Ford could charge. Think of what would happen to innovation when building the best car mattered less than cutting a deal with the highway’s owners.”
Porter hit all the high points – the harm to innovation, the lack of customer choice of Internet Service Providers, the costs to consumers the locked-up market brings – and concluded the FCC “ appears to have made the wrong call” when it did away with the requirement that carriers share their lines with others. The pending cartelization between Verizon and the big cable companies “suggests a market carve-up is about to take place, with Verizon focusing on wireless broadband and cable companies on wires into the home.”
He took on the Federal Communications Commission (FCC) saying that, “right now, regulation appears weak. The F.C.C. has net neutrality rules. But the agency lost one neutrality case against Comcast in 2010, and Verizon is challenging the new rules issued in response to the ruling. The rules, moreover, have loopholes. For instance, they allow broadband providers to allocate portions of their pipes for special ‘managed’ services.” Porter is right.
It was particularly cheeky of FCC Chairman Julius Genachowski on May 8 to list to the wireless industry at its annual conference that among the FCC’s accomplishments was “establishing rules of the road to preserve Internet freedom.” Those rules, now under court challenge, basically exempted wireless.
Porter’s conclusion, too, was right on point: “Fifty years ago, consumers were allowed to hook up only Bell telephones to their Bell phone lines. But in the 1960s, the F.C.C. and the courts forced the Bells to accept any device that didn’t threaten the network. The decision unleashed a torrent of innovation — including the answering machine, the fax and the first device that allowed us to explore what would become the Internet: the modem. Innovation online requires an open playing field, too.”
The conclusion should be clear: Without an open network, and more competition, U.S. innovation will go up in smoke.