Internet Landlords Seek Access Monopoly
|January 9, 2007||Posted by Staff under Archive, Progress Report, The Progress Report|
Beware the Digital Landlords
Thanks to www.tompaine.com for alerting us about this matter.
The Internet’s Openness and Diversity Are at Risk
by Jeff Chester Dear Internet User:
The Internet has become a medium on which many of us now depend, for communications, information, and even for entertainment. It has become essential in so many ways — from sending messages to loved ones to finding information useful for our personal lives. The Net has become important to the economy as well, as the rise of the dot-com world illustrates. Finally, the Internet is a vital outlet for the range of news and perspectives beyond what is covered by the established, mega-merged media marketplace.
For all these reasons the ability of all of us to surf the Internet at will — to roam and discover a diversity of voices and alternative viewpoints, and to innovate on what we find — is too important to limit. Yet this is what’s at stake right now in Washington as the future shape of the ‘net is determined.
That’s because the very nature of the Internet — and the fair and commonsense rules that govern its existence and use — are being deliberately changed by a handful of media giants.
Companies such as AT&T, Time Warner (and its proposed merger partner America Online) seek to become gatekeepers over the Internet, just as they are now the gatekeepers of cable television. These self-proclaimed “Lords of the Net” want to be able to decide who has access to the Internet, under what terms, and the manner in which users will be able to retrieve such content.
Can any single entity control the Internet?
With its thousands of service providers, millions of Web sites, and billions of pages, how is it possible for any single entity to control the Internet? That’s because the Internet itself is changing, moving toward a new high-speed, cable-based “broadband” system.
The Internet as we’ve known it is being replaced by new consumer services that combine data delivery with TV and other video programming (and eventually local and long-distance telephony, too). Such bundled, broadband service, combining the power of the computer with the simplicity of television, will eventually become the standard way the Internet will be delivered to our homes. Cable conglomerates are exploiting this new environment in order to transform the public and open nature of the Internet into a closed, proprietary system. Today’s “dial-up” net access, meanwhile, which uses a plain phone line, will become a second-class service.
Although telephone companies (with DSL connections) and soon wireless services also compete for broadband subscribers, cable operators dominate that market. Cable’s “big, fat, pipe, ” as the Washington Post called it, is perfect for delivering faster Internet access. Unfortunately, just as the cable industry has a near-monopoly in every community, with one company controlling access to such channels as ESPN and CNN, it wants similar control over high-speed Internet access as well.
Cable sees huge profits, naturally, in controlling these new broadband pipelines. AT&T has spent $90 billion in the last three years to become the nation’s largest cable company. AOL is swallowing Time Warner in a merger worth $350 billion. And former Microsoft co-founder Paul Allen has anted up more than $7 billion to buy cable systems in an effort to cash in on the new cable-controlled Internet marketplace. Even Allen’s former partner, Bill Gates, has made cable a significant investment for Microsoft. These media giants know that under current law, those companies that own the cable wire can also control how we all use the Internet.
Trading “open access” for manipulated access
Today’s telephone-based Internet is required by law to be an “open” system. Telephone companies are prohibited from dictating how, or by whom, Internet service is delivered. As a result, there are more than 7,000 different companies in the U.S., known as ISPs (Internet Service Providers), that offer Net access. The “open access” of the current Internet has allowed anyone to publish and create content, spawning the rich tapestry of commercial (“.com”), educational (“.edu”), and nonprofit (“.org”) offerings. This “open-access” requirement for the Internet has been called the “golden goose” by leading financial analysts, who recognize it as the main driver of economic growth online. With no one in control, everyone has had a chance to create content, to offer new services or information, and perhaps to prosper.
But the cable industry isn’t required to adhere to the same “open access” requirements that govern the local telephone companies. The cable company that owns the wire can thus decide what news and information sources it wants to offer. Not having to open up its wires to competitive ISPs, cable providers effectively control how its customers get Net access. By placing its own and its affiliates’ content in favored on-screen positions, and by dictating which start pages, search engines, and email services customers may use, the cable company is positioned to reap huge financial rewards at the user’s expense.
In a chilling blueprint of this bleak future, the Cisco Corporation, which is helping build the high-speed Net for cable, has described ways that network operators can manipulate Internet to their own advantage, impeding access to unaffiliated Web sites, for example, while expediting delivery of proprietary material. In other words, cable companies will be able to make its own Internet services fast and reliable, while competing sites-or those that the company finds disagreeable for any reason-could get second-class service. In the process, many of these services will effectively be banished from the mainstream byways of electronic life.
It is this manipulation of access which so unnerved European Commission regulators, who recently included their concerns in a publicly released preliminary opinion on the AOL-Time Warner merger. The merged AOL, the Europeans said, could trap its customers in a “cul de sac” that could limit their ready access to the rest of the Internet.
Time Warner unwittingly offered a televised preview of such monopolistic behavior last May, when it abruptly dropped ABC network programming from several of its cable systems across the country, in a dispute with ABC’s owner, the Walt Disney Company. If the country’s second largest cable company can pull the plug on the nation’s most successful TV network, imagine what it will do to Internet content coming from much smaller competitors.
In fact, the cable industry has openly described its plans to build “walled gardens” of online programming. or think of them as “gated communities” that reduce the Internet to a narrow menu of choices. This garden would be more like a digital prison, a place where the cable-company ISP uses its control over the technology to keep you and your families watching the websites, content, and ads all owned by or affiliated with them and their partners. The Internet as we know it, in the words of one AT&T executive, will be available only through a “back door” in the system, beyond the reach of all but the most technologically sophisticated users.
The nation’s leading consumer and civil liberties groups are opposing cable’s plans.
Consumer’s Union, the Consumer Federation of America, the ACLU, and others have asked the government to require open cable access. They want the high-speed Net to be as nondiscriminatory and open as the ‘net we use today. But the cable lobby, with such political powerhouses as AOL, AT&T and Time Warner, have lobbied against this proposal. Ironically, until AOL announced its plans to merge with Time Warner last January, it was in the forefront of those fighting for a cable open-access requirement. But as soon as it became a cable landlord itself, AOL quickly renounced its support for an open-access policy, promising that the “market” itself would provide a solution.
But the principles of open access and nondiscriminatory transport are too important to leave to the play of artificially skewed market forces alone. We need a fair and open Internet — to ensure that there’s a real diversity of voices; that all kinds of viewpoints are treated fairly; and that anyone who has a web site or wants to start an e-business won’t be held hostage by the self-proclaimed digital landlords.
Fortunately, we have an opportunity now — with the proposed merger of AOL and Time Warner — to ensure that these kinds of commonsense and fair Internet safeguards will become law.
Both the Federal Trade Commission and the Federal Communications Commission have to approve this merger. Consumer groups have opposed the merger, because it will concentrate more control over the media, including the Internet in fewer hands. These groups have asked both the FTC and FCC to require AOL and Time Warner to accept an open-access requirement as a condition of the merger. This is the same policy that AOL — before its announced merger with Time Warner — once asked policymakers to impose on AT&T. It’s a fair and simple rule that would still allow these companies to make a great deal of money. But it would not allow them to become the Internet’s gatekeepers.
The consumer and public interest groups also want to make sure that we don’t develop a super media monopoly over the Net by requiring AT&T and AOL-TW to sever the financial ties they have with each other. Unless this happens, two tightly aligned companies will control more than 80 percent of the high-speed Internet marketplace.
The FTC and FCC need to hear from you, and the ACLU web site can help you register you opinion. Tell them you want to make sure the Net stays free and open — that we cannot afford to allow the cable monopolists to become the Internet’s gatekeepers, too.
Jeff Chester closely follows the AOL-Time Warner merger, and other issues, as Executive Director of the Center for Media Education.
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