Under their plan, the rate to ship oil would double, and Rockefeller's Standard Oil Company would get rebates for every gallon of oil shipped, even those shipped by its competitors. South would also collect information on the destinations, costs and dates of competitors' oil shipments.
Once word leaked, independent oil producers revolted and managed to stop South before it shipped a single gallon. But to a great extent, the damage had been done. Rockefeller offered to buy out his competitors, showing them his books so they'd know what they were up against. They had a choice: Sell out now, or be run into the ground. Standard Oil went on to control the production of oil throughout the United States until the Supreme Court broke it up in 1911.
What does a 19th-century oil monopolist have to do with the modern-day Internet world of ones and zeroes? Well, we all know how nicely things work out when oil men are in charge.
But the real key is the railroad—the transport route, the superhighway. It's more than a stale metaphor for talking about the abstract technicalities of the Internet. The way valuable goods are delivered—be they gallons of oil or binary packets—hasn't changed much.
When the invention of radio and telephones spurred Congress to regulate communications, legislators used transportation law as a model—with the airwaves treated like public space over which information travels.
Now, as Congress votes on its first major telecommunications bills since 1996, telecom and cable companies are seeking preferred status for Internet content providers willing to pay for fast downloads, with slower service for everyone else—an Information Super-Tollway, if you will.
By now, you've probably heard about the issue of "network neutrality." The term doesn't tell you much. (And it's not much of a rallying cry—as Arianna Huffington recently observed on her blog, HuffingtonPost.com: "Why are the bad guys so much better at naming things? Especially legislation.") A term like "Internet equality" might be more evocative in the political arena and would make the same point better: that all content should be treated as equal regardless of its source. In other words, that all Internet companies continue to get charged the same rate per byte of info they're transmitting, rather than higher rates for faster access. That's been the protocol since the Internet was created.
But the telcos want to create a tiered system that would leave them free to price the market well out of reach for your favorite website, be it porn or politics, forcing that site off the super-Tollway and into the Internet equivalent of I-5 at rush hour.
When cable companies got into the business of broadband, the FCC ruled that the net-neutrality protocols in place since the Internet's creation didn't apply to them, says Craig Aaron, a spokesman for the net-neutrality coalition SavetheInternet.com.
After the Supreme Court last year upheld that FCC conclusion, phone companies sought similar treatment, and Aaron says they stand to get it in August.
All that's stopped cable, and all that would stop the phone companies, from creating different tiers for better access is the technology and the desire to "be on their best behavior" until Congress completes that first overhaul of telecommunications law in a decade, Aaron says.
"Once the genie is out of the bottle," he says, "you can't put it back."
The last Telecom Act, in 1996, deregulated the communications industry, bringing about widespread media consolidation. It opened the door for Clear Channel's acquisition of hundreds of radio stations. It allowed phone and cable companies to consume one another ravenously, undoing many decades' worth of antitrust measures. From a public-interest point of view, the law has been a disaster. It's also out of date: The Internet is mentioned fewer than a dozen times.
Now the Senate is considering the Communications, Consumers' Choice, and Broadband Deployment Act of 2006, a massive overhaul of telecom policy sponsored by Sen. Ted Stevens (R-Alaska). A House version, called the Communications Opportunity, Promotion, and Enhancement Act passed last month.
Both bills cover a lot of ground. They would overturn state laws that prevent cities from setting up their own community Internet services, which is good. (Portland's plan to provide citywide wi-fi is not affected by the bill, since Oregon communities have always been free to provide such services.) They would establish a national video franchise system to allow telephone and cable companies to offer broadband TV service without having to make the local agreements the cable companies currently have; thanks to public outcry, the bills also ensure funding for public-access programming, though many would say it's not nearly enough.
Of most concern is the appearance that Congress will let telephone and cable companies charge different rates to different content providers. To preserve the Internet itself, Congress needs to make a clear stand during this deregulation against letting Internet service providers filter content—30 years of protocols and global standards demonstrate that the Internet by its very nature is neutral in how information has moved from one computer to another.
Net-neutrality legislation would ensure that every Web-based business and every site, be it personal, political or commercial, would be treated the same by the systems that power the networks. If those networks cease to be open, consistent and predictable, if they begin to interfere with the content that passes through their pipes, we'll still have broadband networks, but the Internet as we know it will be history.
Repeated attempts to add net-neutrality protections to both versions of the legislation have failed. On June 28, the Senate Commerce Committee voted down the net-neutrality amendment offered by Sens. Olympia Snowe (R-Maine) and Byron Dorgan (D-N.D.). The measure failed in a tie vote of 11-11, with Sen. Gordon Smith (R-Ore.) voting against.
Smith spokesman Chris Matthews says the senator is "very concerned about adding government regulation to the Internet, especially when it has nothing to do with consumer rights and runs the risk of delaying and discouraging the deployment of broadband."
It's not a consumer rights issue, Matthews says, because network service providers aren't trying to restrict access to websites or software.
"This is simply a question of whether the companies that have laid the fiber-optic cable to run the Internet at high speeds...will be able to charge accordingly and whether a free market is going to exist or whether the government is going to regulate it and set prices," Matthews says. "The government actually telling the providers how to run their business is a dicey proposition at best. The senator happens to believe that the Internet functions best when it functions freely."
But Sen. Ron Wyden (D-Ore.) disagrees and is fighting for net neutrality. Last Friday, he took to the Senate floor to denounce what he called a "handful of insiders in Washington, D.C." who want to eliminate that neutrality, leading to discrimination on the Web between the haves and the have-nots.
Wyden's stance is in keeping with his actions right after the Commerce Committee vote last month when he marched to the Senate floor and placed a "hold" on the Stevens bill just as the Senate was preparing to vote—in other words, he announced his intention to filibuster, holding up other Senate business. Wyden announced that he would not allow Stevens' bill to pass without net-neutrality provisions.
"Without a clear policy preserving the neutrality of the Internet and without tough sanctions against those who would discriminate, the Internet will be forever changed for the worse," he said. "Those who own the pipes, the giant cable and phone companies, want to discriminate in which sites you can access. If they get their way, not only will you have to pay more for faster speeds, you'll have to pay more for something you get free today: unfettered access to every site on the World Wide Web. To me, that's discrimination."
Stevens lacks the 60 votes among 100 senators needed to override a filibuster, so for now, net-neutrality advocates are lobbying the fence-sitters. If they can get 41 senators to hold firm defending Wyden's hold on the measure, they can stop the entire telecom overhaul from going through, making net neutrality the deal-killer.
Here's the danger of life without net neutrality: Currently, an Internet service provider, or ISP, charges the companies whose sites it hosts, be they Google or Willamette Week, the same amount of money per byte that's transmitted. What Verizon, Qwest, BellSouth, Time Warner, SBC, Comcast and AT&T—the main supporters of the new telecom legislation and opponents of net neutrality—want is to charge content providers more for higher levels of service.
A news content site like The New York Times could sign a high-dollar agreement with an ISP for that fast service, making its competitors less appealing to the 80 percent of Americans who get their news online. How slow will rank-and-file websites be in that system? How easy will it be to read the liberal blogs or download the indie podcasts? That would be up to the ISPs.
In March, Qwest CEO Richard Notebaert told a crowd at a Voice over Internet Protocol convention in San Jose, Calif., that net neutrality is a pipe dream. He let the heads of silicon startups and content sites know that they're going to have to start shelling out if they want to keep their traffic. "If you have enough money," Notebaert said, "we can make a lot of things happen."
The industry says it needs a tiered system because it needs to pay for providing bandwidth to all those little video clips that YouTube posts on its site—even though YouTube pays the same amount per bandwidth volume it uses as does the smallest video site that uses much less bandwidth.
The next time you see an ad for Qwest's DSL broadband service, notice that streaming video is part of the lure of paying $26.99 or more a month. A recent Associated Press story quoted Verizon and BellSouth spokesmen warning that as the video trend continues, the Internet could choke: Like an overbooked flight, an ISP would be over capacity if all of its subscribers downloaded high-quality video at the same time.
But as the story also points out, Internet traffic doesn't work that way. It grows along with the capacity, not ahead of it. We wouldn't be watching YouTube videos over a 64K modem, because it would be too slow and wouldn't be worth the aggravation.
The industry says all that innovation will cost money, and that they will have no choice but to pass even more cost on than they already do to consumers. The fact is, ISPs have been whining about multimedia content since RealAudio first launched its streaming sounds in 1995. Not only has the Net survived, ISPs have raked in billions in profits as a result.
In addition to charging different fees for different providers, there is also the fear that telcos would use their gatekeeping power to block access to the sites of their competitors and critics.
The telcos insist they would never do anything like that: The FCC wouldn't let them get away with it, they say—and anyway, they wouldn't want to.
At the very least, it's no stretch to think they would give preferential access to their own content. When AOL bought Time Warner in 2001, it was a delivery system merging with a content company. Time Warner owns CNN, HBO and a huge movie library. The ongoing convergence of content and telecom companies would reach its logical conclusion in offering faster Road Runner downloads for those sites and channels. Why wouldn't the industry go there if the law let them?
So is net neutrality a lost cause, the failing hope of a few consumer activists and First Amendment types?
Not necessarily. The giants of the Web are on their side. Amazon, Google, eBay and every other major content site don't want to pay a toll. They're part of a coalition urging Congress to enshrine net neutrality into law. Like the successful alliance that pushed back on media-ownership deregulation two years ago, the net-neutrality coalition spans the political spectrum.
It includes not only lefty groups such as MoveOn and Common Cause, and mainstream groups such as the American Library Association and Consumers Union, but also the Christian Coalition, Gun Owners of America, the Parents Television Council (crusaders for decency laws), and Prof. Glenn Reynolds, better known as the right-wing blogger Instapundit.
It's not hard to understand why this issue reaches across the political spectrum. The Internet has made possible a democratic discourse that is truly stunning, transforming political organizing and communication while the mainstream tries harder and harder to suffocate ideas that don't follow standard party lines.
As you might expect, opponents of net neutrality are pumping money into Congress. A recent report by the Center for Public Integrity noted that, while both sides of the debate contribute significant amounts of money to federal campaigns, the telcos spend more than three times the amount that Internet companies do—$9.1 million from the PACs, lobbyists and employees of cable and phone companies like Verizon and Comcast, compared with $2.7 million from those of Internet companies like Google and Amazon. While these are the main players atop the pyramid, groups like the Christian Coalition and MoveOn add some money to the fight—as do media content companies with ties to ISPs, such as Time Warner. The interested parties are legion.
Industry money is also funding a heavy-duty advertising and PR blitz, some of which is conducted by "Astroturf" (phony grassroots) organizations such as Hands Off the Internet ("Say no to government regulation of the Internet") and FreedomWorks ("Lower Taxes, Less Government, More Freedom"), which are funded by the telecom companies. Their spin: The market will sort things out—if customers don't like the tiered service, they can pick another provider; Internet service providers have no plans to block content, so there's no problem; even if they did, the FCC already has the jurisdiction to punish them for it, so why get government any more involved?
The FCC's connectivity principles state that consumers are entitled to access the lawful Internet content of their choice, run applications and services of their choosing and connect to their choice of legal devices that do not harm the network; they are also entitled to competition among network providers, application and service providers, and content providers. Like the airwaves, the broadband lines are regulated by the FCC because they run along public rights of way—wires and cables are run along public streets and buried under people's back yards. ISPs charge for the privilege of connecting, but nobody "owns" the Internet.
Net-neutrality proponents warn that the current bills would prevent the FCC from strengthening or adding language to its regulatory power. There has been only one case in the United States in which an Internet service provider blocked access to a specific website or service. Mebane, N.C.-based Madison River was fined $15,000 last year by the FCC for blocking traffic to download an application from the website for Vonage, the online phone service.
Madison River had about 121,000 residential phone subscribers and nearly 40,000 broadband Internet subscribers at the time. Vonage had more than a million. About a month after Vonage complained to the FCC that Madison River was "port blocking," or preventing certain types of Internet traffic from traveling through its networks, the agency took action.
But the FCC's principles don't address the kind of tiered system the telcos want to create. Nor do they establish clear methods of enforcement. Vonage was already hugely successful when it took on Madison River. What happens to the startups? Furthermore, these principles haven't been formalized, and the FCC has indicated it will not enforce them without a mandate from Congress.
If the Senate does pass the Communications, Consumer's Choice, and Broadband Deployment Act, the last-ditch option lies in the conference committee that will iron out differences between the House and Senate versions. The telecom bills specifically prevent the FCC from issuing new regulations on the issue of net neutrality, so while the agency could take action on a clear-cut case such as Madison River, there's no real chance of strengthening its position. Google vice president Vint Cerf, one of the Internet's creators, has said that if Congress won't ensure net neutrality, Google won't hesitate to file an antitrust case with the U.S. Department of Justice. "We will simply have to wait until something bad happens," he said.
The fact is, the Internet supports the freest market in existence, and the tiered system would destroy it. Above all, it is this contradiction the net-neutrality movement must get across to Congress—and to the public. Otherwise, we'll be signing over American democracy's greatest asset to modern-day John D. Rockefellers.
A version of this story originally ran May 17 in The Independent Weekly in North Carolina. The writer updated the piece for WW.
Gains and Pains
The telecommunications bills Congress is fighting over deal with a broad swath of issues, some of which would benefit consumers and others of which would hurt them.
• State laws barring cities from establishing community Internet services would be overturned.
• Funding for public-access programming would be ensured.
• The last telecommunications overhaul in 1996 barely dealt with the Internet, and the law needs updating to deal with the decade-long explosion of the Web.
• The bills would let Internet service providers charge websites more if they wanted faster access to your screen. The result: Some of your favorite sites wouldn't be able to pay the toll and would download slowwwly.
• Those same ISPs could block access to the sites of their competitors and critics.
Will the loss of net neutrality be the Silicon Forest's spotted owl, the catalyst that brings down an industry?
Bart Massey, associate professor for computer science at Portland State University, certainly believes it would.
Massey is an active participant in Portland's vibrant open-source community, the breeding ground for software innovation that's partially responsible for the city's reputation as a hotbed of the creative class. He says that community would be "massively" affected since its members rely heavily on the free movement of large data packets as they exchange ideas.
These innovators aren't nerds uselessly obsessing over ones and zeros; among them are the creators of the next Google or Linux software—tomorrow's powerhouses of the high-tech economy. The loss of net neutrality "cuts down massively on the ability of these entrepreneurs to present a business plan anyone would fund," says Massey.
Massey says U.S. open-source developers already "feel like the stepchildren of the world, because this whole question [of eliminating net neutrality] sounds silly in other countries." He lists electronics exporter South Korea as one of the countries where "the government builds up the network, so that every stinkin' home can have access to bandwidth."
Another community concerned with the loss of net neutrality is the blogosphere.
Kari Chisholm, one of the creators of the Blue Oregon blog popular with progressives, was also quick to point out the hardships the bill creates for the "tiny Internet start-ups, and the open-source community" in Portland.
Chisholm says the threat to net neutrality "is no big deal for the basic Web page" consisting mostly of print, as many blogs do.
But there are new places online "where people find out what's going on locally and nationally," he says. Sites such as leftyblogs.com feature engines that "go out and read 2,000 blogs every hour, and present their findings organized by state." That requires a lot of bandwidth, and Chisholm fears for the future of these outlets. "If the bad guys want to charge extra for high-bandwidth operations," he says, "this service will become unsustainable."
—Jacques Von Lunen
To read what net-neutrality supporters are saying, go to www.SavetheInternet.com. To learn what opponents are saying, go to handsoff.org.
Attempts by Sen. Ted Stevens (R-Alaska) to explain cyber-technology have been lampooned at length online. In a much-circulated speech, he pointed out, "The Internet is not a truck, it's a series of tubes." This soundbyte soon swirled around said tubes in the form of techno re-mixes and spoof graphics.
Stevens' speech is available at: www.blog.wired.com/27BStroke6/?entry_id=1512499. His metaphors are visualized here: www.southwestern.edu/~ramseyp/stevens-net/. And a club remix featuring Stevens on vocals can be found at www.boldheaded.com/podcast/steves_viral/DJ_teds_techno_tubes.mp3.
Portland-area Reps. Earl Blumenauer and David Wu (both D-Ore.) voted against HR 5252, a massive telecommunications overhaul that doesn't include net neutrality provisions. Despite her support for net neutrality, Rep. Darlene Hooley (D-Ore.) voted in favor of the bill, citing other consumer benefits.
Blumenauer, Wu and Hooley voted with the minority in favor of the Network Neutrality Act of 2006 (HR 5273), which laid out specific definitions and enforcement mechanisms for net neutrality; enforcement remains under the FCC's jurisdiction.