Four recent developments signal that net neutrality proponents of the FCC’s December Open Internet Order are hearing footsteps and looking over their shoulder, increasingly concerned about the ultimate legal and political survivability of the net neutrality regulations/order.

First, professor Susan Crawford, one of the most ardent proponents of net neutrality rules and Title II reclassification, penned a telling and surprisingly candid analysis of how the Supreme Court’s recent decision to overturn a California ban on the sale/rental of violent video games to minors, on First Amendment free speech grounds, very likely helps broadband providers’ free speech argument to overturn the FCC’s net neutrality rules.

  • Professor Crawford concludes: “Today’s news is that the absolutist approach of the current Supreme Court to protection of speakers of all kinds — including distributors of speech — signals that the carriers will be likely to find a sympathetic ear there.

The irony here is that a net neutrality proponent thought leader is implicitly acknowledging that the main slogan of FreePress/Save The Internet and others — that “net neutrality is the First Amendment of the Internet” — is a totally bogus.

  • The Supreme Court affirms that the First Amendment protects people (and incorporated entities which are legally “people”), from Governmentinfringing on people’s Constitutional right to free speech.
  • FreePress perverted the concept of the First Amendment by claiming Government should regulate broadband providers to protect citizens’ speech from companies’infringement.
  • Now Professor Crawford is unwittingly spotlighting how utterly bogus it is to assert net neutrality is somehow the “First Amendment” of the Internet.

Second, the FCC has said it will permanently delete the practically-defunct-but-still-on-the-books “Fairness Doctrine” for broadcasting, from the Code of Federal Regulations, as early as this summer. 

  • The Administration and the FCC are obviously aware of, and sensitive to, the charge that there is way too much regulation of business when the economy is so sluggish and not creating enough jobs.
  • This is a tacit admission that the FCC’s Open Internet Order is very unpopular and this appears to be an attempt to throw a bone to Hill critics of the FCC and the Open Internet Order. 

Third, the House voted to defund FCC implementation and enforcement of the FCC’s net neutrality regulations in the Open Internet Order, and some Senators are scrambling to try and head off the Senate from following suit.

Fourth, the FCC has finally, after six months of counting, recounting, and recounting again, the paperwork burden hours of the FCC order, has sent its Open Internet order to OMB for review, which creates a rough process of review that will likely result in the order being published in the Federal Register in the September-October timeframe. 

  • When the rules are published in the Federal Register, the companies then finally can sue to over turn the order and the Senate can start the process of voting on a Resolution of Disapproval — a process that under the rules cannot be filibustered.
  • Releasing the rules appears to be a recognition by the FCC that it cannot plausibly stall the release of the order any longer and that the process must be allowed to run its statutory and Constitutional course.
  • My analysis is that the order will be overturned (see analysis here) because the FCC does not have direct statutory authority to justify the overreach. Thus the courts will probably never have to get to the legitimate and strong First Amendment argument.
    • My view is bolstered by the FCC’s tactical mistakein releasing the Data Roaming order, which is on even shakier legal ground first, so that it gets legally challenged and decided before the Open Internet order.
    • With two reinforcing decisions that the FCC does not have the direct statutory authority to economically regulate broadband information services — Comcast vs. FCC and the data roaming order — it will be very hard for the next court to not to follow double precedent and overturn the FCC’s open Internet order.
  • The FCC’s delaying tactic also moved the Senate Resolution of Disapproval six months closer to the election making it harder politically for Senators in tough reelection races to publicly support questionable Internet regulation that hurts growth and jobs, given that the President can always veto it, and given the political outcome in the 2010 midterms when ALL 95 publicly-pledged supporters of net neutrality lost in their bid for election. 

In sum, the clear trend here is that the FCC’s Open Internet Order has gotten more unpopular over time. Unnecessary, unwarranted, unjustified regulation in a sluggish economy that is not producing enough jobs is getting increasingly difficult for net neutrality proponents to support.

  • In a word, promoting net neutrality and the FCC’s Open Intenet order is a legal and political loser.
 
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In another blow to its competition policy credibility and objectivity, the FCC’s 308 page, 15th Wireless Competition Report, amazingly reached no conclusion about whether the wireless market was effectively competitive, despite overwhelming evidence of effective competition throughout the report and a dearth of evidence in the report of any discernible anti-competitive issues that would suggest the wireless market was somehow not effectively competitive.

  • The stark incongruity between the overwhelming evidence in the report, and the absence of what should have been an easy report conclusion that the wireless market is effectively competitive, is certainly not “data-driven policy making at work.
  • It appears to be politics at work to support and provide political cover for the FCC’s maverick policy desire to promote de-competition policy and more expansive FCC economic regulation and common carrier-like duties a la net neutrality and data roaming — in the face of strong opposition from Congress and the Courts that the FCC is over-reaching its statutory authority.

If only the FCC absorbed the significance of the data compiled in their own report, the FCC would conclude that the wireless market was effectively competitive.

  • The report stated that in comparison to other countries, U.S. consumers enjoy much lower average prices and hence are able to afford dramatically more wireless usage than other nations.
  • All of the report’s big measurements indicated effective competition:
    • More deployment and more coverage by more competitors;
    • Growing subscriber-ship and connections;
    • Rapid growth in data usage;
    • Dynamic mobile data innovation and new applications;
    • Pricing slightly down, and markedly down for texting (which is facing free Internet IM alternatives;)
    • Overall industry revenue growth despite quickly falling voice revenues;
    • ARPU, the monthly cost per user, fell 3% showing increasing consumer value capture; and
    • Infrastructure investment remains high and up slightly as wireless providers must continually invest to stay competitive.
  • The report also did not include the data that most strongly shows how effectively competitive the wireless market is: advertising expenditures.
    • Non-rivalrous markets don’t need lots of advertising because there is little real risk of competitive churn.
    • The billions the wireless industry spends on advertising every year is incontrovertible evidence of how fiercely competitive the wireless market is. 

In sum, the copious evidence of effective competition in the FCC’s own 15th Wireless Competition Report puts the FCC in the untenable position of denying the success of fifteen years of competition policy and de-regulation.

  • No amount of conclusory gerrymandering and smoke and mirrors by the FCC will fool Congress or the Courts, who can plainly see for themselves what the “expert” agency cannot see: effective wireless competition.

The FCC’s unwillingness to acknowledge the obvious conclusion that flows from their 300+ pages of effective competition evidence, underscores the need for Congress to reform the FCC’s competition report process by eliminating all silo-driven competition reports (Like this wireless report) and do one periodic broad Internet competition report that captures the multi-dimensional nature of Internet competition, which includes, but is not limited to:

  • Intra-modal competition withina technology;
  • Inter-modal competition betweentechnologies;
  • Inter-industry/sector competition amidstdifferent industries/sectors that previously did not compete;
  • Multi-model competition amongstall of the above; and
  • More.

Simply, Congress needs to define up competition to counter-balance the FCC’s natural bureaucratic bias to define down competitive markets to the point that self-justifies their need to economically regulate.

*****

Previous Parts of Internet Competition Series:

  • Part I:  “Denying Competitive Substitution is the Weakest Link of FCC’s De-Competition Policy”
  • Part II: “A Critical FCC Reform Needed to Keep the FCC Current”

 

FreePress co-founder and collectivist ideologue, Robert McChesney, wrote his latest Internet manifesto: “The Internet’s Unholy Marriage to Capitalism,” in the Monthly Review – An Independent Socialist Magazine.”

McChesney’s collectivist and elitist manifesto warrants attention because it is widely disseminated to:

  • Also to his new FreePress spawn: The Democracy Fund, founded by FreePress co-founder Josh Silver to raise funds to “curb the undue influence of corporate lobbyists,” and RootStrikers founded by Larry Lessig, co-founder of Save the Internet, in order to organize an activist network “to fight the corrupting power of money in politics.”
    • Both of these new FreePress spawn networks are being created as new indirect organizing vehicles to advance FreePress’ collectivist vision for net neutrality, Title II broadband regulation, and media reform.

The dual thrusts of McChesney’s latest laborious diatribe against capitalism and private property are: 

  • First, the Internet is essentially a zero sum game where “private riches grow at the expense of public wealth,” and
  • Second, capitalism invariably leads to monopolization.

 Some other major McChesney points:

  • Our critique… will repeatedly demonstrate the weaknesses of allowing the profit motive to dictate the development of the Internet.”
  • Concerning the Internet “…it is difficult to avoid noting that what is emerging veers toward the classic definition of fascism as right-wing corporatism: the state and large corporate interests working hand-in-hand to promote corporate interests, and a state preoccupied with militarism, secrecy, and surveillance.”
  • In sum, the Internet, if left prey to capitalism — to having the hunt for profits dictate its development — has veered off in a direction that downplays and undermines, rather than exploits and accentuates, the most revolutionary and democratic aspects of its technology.”
  • … the Internet is being turned into… a new means of alienation. … The moral of the story is clear. … A global network of resistance is both necessary and feasible.

Mr. McChesney’s screed cherry-picks and copiously documents the little bits of history that support his theory, while largely ignoring most all of economic and Internet history that does not fit with his collectivist revolutionary vision and agenda.

For example, Mr. McChesney waxes nostalgic for the early Internet days:

  • The early Internet was not only non commercial, it was also anti-commercial. … If anyone dared to sell something online, that person would likely be “flamed,” meaning that other outraged Internet users would clog the individual’s email box with contemptuous messages demanding the sales pitch be removed. This internal policing by Internet users was based on the assumption that commercialism and an honest, democratic public sphere did not mix.”
    • Ironically and tellingly, Mr. McChesney is silent on the fact that it took commercialismof the Internet for:
      • “The masses” to have near universal access to the Internet available to them,
      • The broadband Internet to be deployed, and
      • All the amazing variety of Internet applications and innovations to reach over two billion people around the world.

Another incredible example of Mr. McChesney’s selective amnesia is that after recounting essentially how there can be no market competition only monopolization, he asserts “these firms have no particular incentive to upgrade their networks.” 

  • Mr. McChesney obviously ignores that the U.S. private sector has invested an estimated half trillion dollars in investment upgrades to their broadband Internet networks over the last decade alone!

Yet another glaring flaw in Mr. McChesney’s tortured and backed-into analysis to reach his factually-unsupportable conclusions about the Internet, is his assertion that: “Communication is more than an ordinary market. Indeed it is properly not a market at all. It is more like air and water — a form of public wealth, a commons.

  • This is a patently ridiculous, as air and water don’t embody ideas, thoughts, solutions, innovation, information, emotions, hopes or dreams to name just the most obvious characteristics of communication.
  • Air and water are commodities. Communications are unique and ever-changing.

Finally, Mr. McChesney’s rewriting of Internet history as a non-commercialized commons totally ignores the reality that constitutional democratic processes commercialized the Internet under President Clinton, and a near unanimous Congress of constitutionally elected representatives and Senators put into law in 1996 that: “It is the policy of the United States — to preserve the vibrant and competitive free market Internet that presently exists for the Internet… unfettered by Federal or State regulation.”

In conclusion, the latest screed from FreePress co-founder Mr. Robert W. McChesney is collectivist and eilitist propaganda that is a desperate attempt to rewrite Internet history and recast their radical fringe ideology as reasonable and serious.

  • What I found most remarkable about this latest collectivist manifesto was that Mr. McChesney acknowledged and thanked three current and former officials of the current Administration for reviewing and assisting him in this effort: former White House Special Assistant Susan Crawford, current State Department employee Ben Scott, and current FTC employee Tim Wu.
  • Their handiwork was evident in that this latest manifesto was largely scrubbed of much of Mr. McChesney’s most outrageous, red meat, and radical fringe rhetoric that he employed in the past.
    • Nevertheless, their attempt to publicly sanitize Mr. McChesney’s views were not able to soften or change the main message in his diatribe against capitalism and private property that was captured in his title: “The Internet’s Unholy Marriage to Capitalism.”
  • The fact that so many people were asked to review and edit Mr. McChesney’s latest collectivist manifesto is telling.
    • Either Mr. McChesney, his followers, or both realize that Mr. McChesney’s radical fringe collectivist views are way out of the mainstream, offputting, and a big liability to their ultimate revolutionary goals to reform media and impose an information commons on the Internet.
    • Apparently, they get the fact that FreePress’ ideological grounding, sympathies, and views which are embodied by Mr. McChesney, are essentially an anethema to most all of American society.

Mr. McChesney’s radical fringe views are hardly non-partisan or in the American public’s interest as FreePress constantly claims.

 

One of the simplest and most important FCC reforms Congress could make would be to modernize and streamline the FCC competition report process to stay current with the Internet competition era.

  • Simply, Congress should eliminate and consolidate all legacy analog technology-specific “silo” competition reports (e.g. reports on wireless, video, or satellite competition, etc., including the 706 report) and replace them with one periodic Internet Competition Reportthat is forward-looking, flexible and dynamic so that the FCC and Congress can adapt and keep pace with the ever-evolving Internet competitive landscape.
    • Since the sector is competitively converging, the FCC’s competition reporting process logically needs to converge as well.
    • This common sense best practiceof replacing and consolidating outdated and redundant reporting efforts would not only save money in tight fiscal times, but also result in a more accurately informed FCC and Congress.
    • The FCC cannot stay current or help “win the future” by relying on fossilized competition reporting processes based on outdated technology and competitive assumptions.

Problems with FCC Silo Competition Reports

First, technology-specific silo reports are inherently biased towards a static view of technology, not the natural dynamic nature of Internet technology, competition and innovation.

Second, technology-specific silo reports are inherently myopic and miss the real world big picture of the Internet and digital convergence.

  • Almost by definition these existing reports ignore the multi-dimensional nature of Internet competition, which includes, but is not limited to:
    • Intra-modal competition withina technology;
    • Inter-modal competition betweentechnologies;
    • Inter-industry/sector competition amidstdifferent industries/sectors that previously did not compete;
    • Multi-model competition amongstall of the above; and
    • More.
  • Unfortunately, single isolated technology/industry reports ensure that the FCC and Congress miss the Internet competition “forest for the trees.”
  • This FCC reporting process myopia of looking at competition through the isolated and limited lens one technology industry at a time — almost guarantees that the FCC and Congress miss much of the most important Internet competition and innovation developments that naturally occur outside of their myopic silo lenses.

Third, technology-specific silo reports are also inherently backward-looking, assuming the past will be like the future — despite the purpose and nature of innovation and competition being to improve, change, evolve to meet unmet demands and needs of consumers, the economy and society in unpredictable ways.

  • To correct for this backward-looking FCC process bias in a fast-moving and dynamic Internet-driven sector, Congress should require a periodic FCC consolidated Internet competition report, that includes an ongoing and current list of laws and regulations to be eliminated because they are based on incorrect or out-of-date competitive assumptions, or they are not flexible or keeping pace with evolving demand or technology innovation. 

Finally, if one gets what one measures, then Congress is having the FCC measure and look backward at past structures that are getting increasingly out of date and counter-productive for the economy, the consumer and industry. 

  • To best foster competition, innovation, economic growth, and job creation the FCC should look at Internet competition overall and not in selective isolation. 

To drive this important point home, the most important evolutions in communications competition aren’t considered competition at all officially by the FCC, despite tens of millions of American consumers seeing these evolutions as viable and valuable competitive alternatives for their needs:

  • Facebook’s various text, audio, and video communications technologies;
  • Google’s multifarious communications technologies;
  • Apple and Google’s app technology stores and smartphone platforms;
  • Amazon, Google, Microsoft, Rackspace, and other major cloud computing technologies;
  • NetFlix, Hulu, Google TV, and other over-the-top video streaming technologies; and
  • Microsoft-Skype’s pending integrated calling and videoconferencing technologies;
    • …to name only the most obvious examples.

Conclusion

The old adage is true. One sees what one looks for. If competition and the resultant innovation, growth and job creation that emanates from more competition, are the obvious goals, why should Congress tolerate continuing FCC processes that are chasing out-of-date congressional reporting requirements that have not withstood the test of time and have outlived their usefulness?

  • Simply, if the Congress wants Internet competition to best evolve, flourish and create economic and societal benefits, Congress needs to change FCC’s outdated competition reporting processes that blind FCC regulators to recognizing the massive amounts of ongoing multi-dimensional Internet competition occurring outside of their silo-driven line of sight.

 

Evidence continues to mount that Google’s management and supervision of its Android operating system is out-of-control when it comes to protecting privacy and security.

  • Google’s corporate ethos that it is better to “ask for forgiveness than permission” increasingly means Android has no privacy by design and hence less security for users by default.
  • Requiring and respecting the need for permission and authorization is a bedrock truism of IT security — and the evidence below increasingly indicates that Google has a deep aversion to that IT security truism.

Consider the growing pattern of Google’s default design and behavior that maximizes collection of private information, which inherently puts users at greater security risk. 

First, and profoundly disturbing, is a new TechRepublic revelation in a post by security blogger Donovan Colbert.

In setting up his new Android-based tablet, Mr. Colbert discovered that the Android operating system by default, i.e. without permission, automatically collected and implemented encrytion key passcodes to automatically gain access to private networks without the permission of the user. In Mr. Colbert’s own words:

  • Google is not only storing a list of what hotspots you have visited, but any private encryption keys necessary to connect to those hotspots in the cloud.”
  • “The idea that every Android device connects with that access point shares our private corporate access keys with Google is pretty unacceptable.”
  • “Honestly if there is any data that shouldn’t be harvested, stored and synched automatically between devices, it is encryption keys, passcodes and passwords.” 

Second, we learned from WSJ privacy reporting that Google Android tracked users location a thousand times a day without the users’ meaningful permission.

  • This Google no privacy by design revelation prompted congressional hearings, the scandal moniker “locationgate,” and new legislation from Senators Franken and Blumenthal.

Finally, how does this pattern involve the WiSpy scandal of Google being caught wardriving tens of millions of homes, in over thirty countries, for over three years, eavesdropping on unencrypted home WiFi routers and recording all signals including emails, and passwords.

As you may remember, Google said that systematic eavesdropping on citizens, was the mistake of one engineer, and not at all sanctioned by the company at large.

Here is Google’s 5-14-10 official story:

  • “So how did this happen? Quite simply, it was a mistake. In 2006 an engineer working on an experimental WiFi project wrote a piece of code that sampled all categories of publicly broadcast WiFi data. A year later, when our mobile team started a project to collect basic WiFi network data like SSID information and MAC addresses using Google’s Street View cars, they included that code in their software—although the project leaders did not want, and had no intention of using, payload data.” 

However if Google was being forthright that it’s Android effort indeed did not want to by default to collect the maximum private information possible, why did Google mobile engineering manager Dave Burke tell the Guardian 1-29-08, the following that shows it was obviously Google’s policy to collect the most WiFi information possible…

  • If you’re going to concentrate on location you want every bit of data you can…”
  • “…Cell ID is one location, the address of your Wi-Fi access point is another. The end result is that we want the user to have the best possible experience, and we’ll do whatever it takes to get it … to us they’re just network signals and we’re interested in all of them.
In sum, the pattern here is becoming more clear. Google’s corporate ethos is at work here: “ask for forgiveness not permission.” That ethos puts innovation, speed and efficiency, ahead of the privacy and security of users.
  • The big takeaway here is that Google’s corporate priority is to collect the maximum amount of information by most any means, without meaningful permission or authorization, as fast as possible.
  • This means that Google effectively has a “no privacy by design” approach to privacy, and that security is a lesser priority at Google

***

Previous parts of the “Security is Google’s Achilles Heel” Series:

  • Part I: “Why security is Google’s Achilles heel”
  • Part II: “Google values security much less than others do”
  • Part III: “Google: “Security is part of our DNA” (Do Not Ask)
  • Part IV: “Why Security is Google’s Achilles Heel”
  • Part V: “Google Apps Security Chief is a magician/mentalist”
  • Part VI: “Google-China: Implications for Cybersecurity”
  • Part VII: “Did Google Over-React to China Cybersecurity Breach?”
  • Part IX: “Google’s Titanic Security Flaws”
  • Part X: : “A Google Android Botnet Problem”:
  • Part XI: “Google’s Deep Aversion to Permission”
  • Part XII: “Top Ten Reasons Google Has Culpability in the Gmail Data Breach”

For even more information, see the Security section of PrecursorBlog’s sister site: www.GoogleMonitor.com; or read the “Security is Google’s Achilles Heel chapter of my Book: Search & Destroy Why You Can’t Trust Google Inc. at www.SearchAndDestroyBook.com.