Name.Space on Wed, 31 Mar 1999 07:22:57 +0200 (CEST)

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>Date: Tue, 30 Mar 1999 11:30:32 -0500
>From: Donald Weightman <dweightman@Radix.Net>
>Subject: Article on ISP competition
>This article is forwarded with Andy Oram's permission.
>Don Weightman
>I started this article as a general overview of policy
>issues interesting ISPs (mostly CIX) but it turned into a
>discussion mostly about access to the last mile. I thought
>it might be of interest to this list.
>The opinion piece is currently at the American Reporter
>site, which is at:
>Tomorrow I'll give the article a permanent home (along with
>suitable hypertext links and an index of related articles)
>The article can be redistributed online, with author and
>newspaper attributions intact, for non-profit use.  For
>printing or commercial use, please contact Joe Shea,
>publisher of the American Reporter, at
>                             by Andy Oram
>                    American Reporter Correspondent
>        CAMBRIDGE, MASS. -- Plenty of people have an agenda for the
>Internet. They range from Al Gore asking for more wires in the
>schools, to conservative Congressmen asking for more wires from Bell
>telephone companies; from libraries promoting uncensored access, to
>music studios promoting restrictions on the dissemination of
>copyrighted material.
>        But few users realize that the people bringing us the Internet
>have agendas too. In this column, we hear from Internet Service
>Providers in the United States and their representatives.
>        Until three years ago, few service providers followed
>legislation through Congress or hired lawyers to hang around the
>Federal Communications Commission. They had enough trouble hooking up
>enough routers to satisfy the armies of new users hungry for email,
>keeping lines free from congestion, and fixing poorly configured
>look-up services.
>        The Communications Decency Act was a wake-up call to many
>ISPs. With its vague provisions for assigning responsibility to
>"interactive computer services," it made them realize that politics
>intrudes on the business of providing access.
>        About the same time (1996-1997), the Bell telephone companies
>finally realized the Internet was an important market and brought in
>some serious competition, dragging along with them several decades'
>worth of regulatory bureaucracy.
>        For evidence of awakened ISP attentions, take the Commercial
>Internet eXchange (CIX) -- the largest consortium of ISPs in the
>world, if you measure by volume of traffic. CIX was founded in 1991 to
>provide the first commercial access to the Internet backbone, part of
>the Internet community's conscious move away from government
>dependence. Three years ago, its executive director, Barbara Dooley,
>started a new legislative focus that brought it back to policy tables.
>        CIX helped to fund the ACLU's successful challenge to the CDA.
>Last year, Dooley claims that CIX was a major force in winning a
>turnaround in the Digital Millennium Copyright Act and reducing its
>regulation of ISPs and other Web site providers to just about the
>minimum acceptable to copyright holders. The Copyright Act was a model
>for this year's Internet gambling bill, which replaces a bill CIX
>helped to defeat last year.
>        According to public policy director Eric Lee, CIX also
>publicized the problems with a bill called Murkowski-Torricelli, which
>was advertised as a cure for spamming (unsolicited commercial email)
>but would actually have legitimized and entrenched it.
>        Now Internet providers have lawyers who work on bills across
>the legislative spectrum. Regulatory issues will appear in several
>panels at the next ISPCON, the major conference for service providers.
>        The two chairs of the House Internet Caucus, Congressmen Rick
>Boucher and Bob Goodlatte of Virginia, are planning broad legislation
>that will cover a number of hot topics. Boucher -- who cosponsored a
>copyright act in 1997 that was widely praised by the technical and
>research community -- told me the new legislation would try to be a
>"comprehensive solution for the major challenges that confront the
>Internet today." For him, these include:
>        - the ability of Internet providers to deal with spam problems
>that often slow and clog their services;
>        - ensuring that anyone visiting a Web site will have notice of
>information being collected;
>        - the need to authorize digital signatures for all commercial
>        - an open architecture, so that no ISP is denied access to
>customer base by companies that provide transport;
>        - resolution of bandwidth scarcity in the "last mile" and
>parts of the backbone.
>        Behind each of those agenda items, of course, lies a world of
>controversy. (For instance, privacy action groups would like a lot
>more than "notice" of information collected; they want restrictions on
>its use.) If the comprehensive bill ever emerges, it will hopefully
>receive all the debate and public scrutiny that the Telecom Act of
>1996 should have had, but did not.
>        It is over the "last mile" that ISPs are now fighting, perhaps
>for their very lives. Before a number of regulatory bodies -- in
>states, in cities, and before the FCC -- they are demanding access to
>phone lines and cable services that deliver data to residences. Their
>representatives are also in some disagreement about how to proceed.
>        The last mile issue springs from the near-monopoly control
>over wires going into people's homes in most communities. Few cities
>have more than one cable provider, and almost none have a telephone
>carrier competing with the Bell company for residential service.
>        Furthermore, mergers are reducing the number of players. This
>was actually the plan behind the notorious Telecom Act of 1996.
>Congress hoped to increase competition indirectly by (ironically)
>decreasing the number of communications companies. In this plan, large
>companies were supposed build up resources through mergers and then
>enter each other's turf. In pursuit of the goal, the Telecom Act
>deliberately relaxed limits on multiple ownership and entry into
>        The new regulatory environment may indeed lead eventually to
>some sort of competition -- two or three companies in each locality
>that can offer you everything from video to voice. But what about the
>more than 6,500 independent ISPs in this country?
>        Until the past year, no company could put a roadblock along
>the information highway. Individuals dialed up ISPs as they did to
>make appointments at their local hair-and-nail salons.
>        But then high-speed data became possible through cable modems
>and Digital Subscriber Line telephone service. If the Joneses got it
>and you didn't, you'd be so ashamed you wouldn't even engage them in
>Internet Relay Chat.
>        Phone companies can make life hard for ISPs trying to offer
>high-speed access over DSL. Mark O'Connor, an attorney representing
>CIX before the FCC, says, "If the last mile were truly competitive, it
>is likely that prices for delivering data services would fall and the
>variety of Internet services offered by ISPs would greatly increase
>for the benefit of consumers." Some commentators suspect that Bell
>pricing is high enough to make it impossible for ISPs to offer DSL at
>a profit.
>        Cable is even worse for ISPs, because here there is no
>effective regulation and not even the fledgling competition provided
>in telephone service by competing carriers. Now there are rumors that
>cable service providers @Home and Road Runner may merge (following the
>recently announced merger of their leading partners, Comcast and
>MediaOne -- a merger they promoted as a way to expand further into the
>data market). That would leave a single monopoly Internet provider in
>the cable modem market. The president of AT&T denied that a merger in
>data services was being discussed, however.
>        ISPs are mobilizing on many fronts, both national and local,
>to clear the roadblocks. Nationally, CIX is asking the FCC not to give
>the Bell companies any new opportunities to enter long-distance
>markets, or to offer expanded DSL service, till there is competition
>in DSL.
>        A newly formed organization called the OpenNET Coalition is
>putting similar pressure on cable companies. Locally, the DSL issue is
>fought before state utility commissions that regulate phone companies,
>while the cable issue appears before city utility commissions that
>grant licenses to cable providers.
>        The open access issue has opened a bit of rivalry between
>ISPs. CIX representatives Dooley and Lee call the cable issue a
>distraction; to them, tying cable access to DSL access will only slow
>down DSL access.
>        In defense of the OpenNET Coalition, the number of cable modem
>customers is an order of magnitude greater than the number using DSL,
>and the monopoly of cable companies on their particular segment of
>data access is much more blatant. Dave Baker of MindSpring, an
>Internet provider and cofounder of the OpenNET Coalition, says, "Cable
>bills have doubled in less than 10 years. Is the cable model of
>pricing and lousy customer service going to become the Internet
>        It doesn't help you in sorting out the issues to learn that
>one founding member of the OpenNET Coalition is U.S. West, the first
>Bell company to deploy DSL and thus the one most in the thick of
>battles with ISPs. Correspondingly, CIX counts as one of its members
>AT&T, the company that kicked off the cable controversy by merging
>with TCI, promising to vastly increase cable modem coverage around the
>country, and insisting that all customers go through the TCI service
>provider @Home for Internet access.
>        After ensuring access to their customers, the next agenda item
>of the Internet providers is to avoid liability for what Internet
>users do on their services. Luckily, U.S. legislators and courts are
>getting the message, as the outcome of the CDA, the copyright bill,
>and the gambling act show.
>        The copyright bill originally included liability provisions
>that put providers of Web services at risk when anyone renting space
>on their servers put up infringing material. The final bill includes
>complex provisions protecting these services, requiring in return only
>that the administrators register with the Copyright Office. Dooley
>considers this a very fair exchange and an excellent outcome. (We are
>considering just the provisions affecting ISPs in this article, not
>the other controversial provisions of that enormous bill).
>        The gambling bill originally was "a horror" for ISPs. For
>instance, it would allow a court to require that an ISP block access
>from a particular user to a particular site. Current language still
>places some responsibility on the ISP, but absolves it when blocking
>is "technically or economically unfeasible."
>        Lee says that CIX is "optimistic" about the bill from the ISP
>standpoint, but adds with some cynicism that their achievement
>involved making the bills' supporters reduce their expectations. One
>attorney general, for instance, went from calling the bill a solution
>to saying it would be "a statement of policy." Lee comments,
>"Legislation that its sponsors know won't be effective, and can't be
>effectively enforced, is an unsound approach to making public policy."
>        I am personally wary of the "technically or economically
>unfeasible" language, which is reminiscent of wishy-washy legislation
>passed elsewhere. (For instance, a German lawyer pointed it out to me
>in German regulation of pornography and hate speech on the Internet.)
>Such nose-in-the-tent language gives prosecutors and judges the notion
>that they can determine what is feasible, and to drag ISPs into cases
>where they don't deserve to be.
>        Liability problems rear their heads more often in other
>countries, as for instance in France last month when the ISP
> was forced to pay for unauthorized pornographic poses put
>up by an anonymous user, or even more recently in England when the ISP
>Demon Internet was held responsible for libelous statements that it
>failed to remove from a newsgroup.
>        I asked Dooley to define her general philosophy regarding
>Internet policy, and she said, "Let the market work." This means a
>balancing act where regulation does not hamper ISPs, but offers a
>protective environment for an industry that is still small, where
>businesses are barely breaking even, and where the surrounding
>environment is still being regulated.
>        Thus, she is pleased that the FCC -- which has generally been
>favorable to ISPs -- is maintaining the exemption of information
>service providers from fees and charges levied on telecom providers.
>It would kill most ISPs to change the rules before they are profitable
>and stable.
>        Internet access is an old-fashioned American success story,
>carried out by thousands of local, minimally financed individuals
>working with little more than a pair of pliers, a soldering iron, and
>a vision. Now, according to a brochure circulated by the U.S. ISP
>Alliance (of which CIX is a member), 96% of Americans can reach at
>least four ISPs through a local call -- that's competition. And the
>other 4% can reach at least one ISP through a local call or 800
>        This is an astounding success, and it was achieved not through
>regulation or major investment from a huge corporation, but through
>the efforts of college students, computer administrators, and curious
>techno-tinkerers, often working part time.
>        Perhaps the age of Internet innocence is over, at least in the
>United States. ISPs can now read FCC notices as readily as Cisco
>router documentation. As we have seen, they've found that they have to
>partner with deep-pocketed players and compromise with entrenched
>interests on the Hill. But ISPs are going to be heard from now on in
>policy and legislative circles.
>                              -30-
>Andy Oram is moderator of the Cyber Rights mailing list for
>Computer Professionals for Social Responsibility, and an editor at
>O'Reilly & Associates.
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