MONEY Net neutrality

Why Net Neutrality Isn’t Worth Celebrating

Federal Communications Commission Chairman Tom Wheeler (C) holds hands with FCC Commissioners Mignon Clyburn (L) and Jessica Rosenworcel during an open hearing on Net Neutrality at the FCC headquarters February 26, 2015 in Washington, DC. Today the FCC will vote on Net Neutrality seeking to approve regulating Internet service like a public utility, prohibiting companies from paying for faster lanes on the Internet.
Mark Wilson—Getty Images

Net neutrality doesn't fix the most pressing problem with our internet service.

On Thursday, the Federal Communications Commission officially approved net neutrality regulations intended to protect consumers and businesses from internet service providers.

The new rules, broadly outlined earlier this month by FCC Chairman Tom Wheeler, will restrict ISPs like Comcast and Time Warner from blocking or slowing down traffic to certain websites, or allowing certain companies to pay extra for better treatment.

These regulations are positive step, but those swept up by the hype might end up disappointed when the real thing finally arrives. That’s because net neutrality doesn’t seriously address anything cable companies are currently doing, nor will it help with the number one issue most people care about: the price and quality of their service.

What Net Neutrality Really Does

Let’s start with the restrictions against blocking or slowing down websites. It’s obviously good that cable companies will now be prevented from actively censoring content, but this isn’t something ISPs ever actually practiced.

“I think it’s funny that the three big rules are no blocking, no throttling, no paid prioritization,” Dan Rayburn, principal analyst at Frost & Sullivan and owner of StreamingMedia.com, told MONEY. “That’s all great, but do we have a single instance of an ISP doing any of those things?”

That might sound surprising to those who’ve heard Netflix’s repeated complaints that various ISPs, particularly Comcast, were intentionally degrading its service unless the company paid a “toll.” Isn’t that exactly what net neutrality is meant to stop?

Well, sort of. What Netflix and Comcast are really fighting over is something called “interconnection” or “peering,” where sites with especially heavy traffic have to pay more for extra capacity. Comcast says Netflix should be charged for using additional resources, whereas Netflix thinks it’s being strong-armed into forking over more than it should.

The new net neutrality regulations give the FCC some oversight over these agreements to determine if they’re “just and reasonable,” but that standard is so vague as to make an already complicated issue difficult to enforce. In Chairman Wheeler’s proposal, broadband providers are allowed to pretty much do whatever they want as long as they defend their actions as “reasonable network management,” which, as The Verge points out, is “a term which the ISPs have already been using to justify congestion at interconnection points.”

What Net Neutrality Doesn’t Fix

The upshot of all this is very little will change for the average U.S. internet user in a post-net-neutrality world. That’s a bad thing, because America does have a very serious internet problem desperately in need of regulatory assistance: namely, the fact that our internet connections are slower and costlier than the rest of the developed world’s.

The solution to this problem is simple: more competition. FCC data from 2013 shows 55% of American households have no choice in their broadband provider, and the agency has said Comcast will be the only broadband provider for nearly two-thirds of consumers if the company is allowed to merge with Time Warner Cable. It’s not hard to see why cable companies don’t have to compete very hard for your business.

Competition is scarce because it’s prohibitively expensive for a new company to build its own fiber network. The FCC could have fixed this problem by requiring “last-mile unbundling,” a policy that would force major broadband providers to lease their own networks to competing ISPs, when it reclassified broadband under Title II of the Communications Act. However, Chairman Wheeler explicitly ruled unbundling out of any net neutrality regulation.

This means the average internet user is going to be paying more for subpar internet for the foreseeable future. The Obama administration is planning to address this by encouraging cities to develop their own broadband networks, which, if effective, should create more competition and faster internet service. But such a solution is far away and will likely face significant legal hurdles.

Don’t get me wrong, I’m not saying net neutrality is actively bad. We’re better off in a world with these kinds of restrictions. That said, the new rules should be seen as little more than a preventive measure for abuses that have largely yet to occur. For more meaningful reform, Americans should throw their support behind other policies that will break broadband monopolies and actually improve their connections. The fight for a better internet isn’t over. It’s barely begun.

A previous version of this article said a Comcast/Time Warner Cable merger would increase the number of consumers with no choice in broadband providers to two-thirds of Americans. The FCC says a merger would indeed result in two-thirds of U.S. households having only one broadband provider, but this is not likely to be an increase.

MONEY technology

How to Trim Your Internet Bill After You Cut the Cord on Cable

laptop with cord in shape of piggy bank
Atomic Imagery—Getty Images

Pay attention to how much speed you're paying for—and what you really need.

You can cut your land line and sever your cable TV, but if you want to stream the new season of “House of Cards,” you need to hang on to your Internet connection. Whatever savings you might achieve by ditching other services, you will almost certainly give them back as your bill for Web connectivity inexorably creeps up.

Consumers now pay an average of $50 a month for a broadband connection to the Web, which is up from a monthly average of about $40 a decade ago. But costs can vary widely—ranging from $10 to $120— depending on whether the service is bundled with cable and phone, is an introductory rate, and depending also on your connectivity speed.

Cutting costs for Internet starts with understanding what you are currently paying. Most people cannot even parse this out because their bills are a jumble of bundled pricing and fees, says Kim Komando, who has hosted a national radio talk show on computers and technology for more than 20 years.

“If you haven’t looked at your whole internet package, then it’s time to go through it A-Z,” she said.

The items to look for include: the base price, speed surcharges, and equipment. If you cannot figure it out based on the arcane coding on your bill, call and ask.

One potential way to save is to buy your own modem/router combination—at $50 to $100, you could quickly make up the $5 to $10 a month rental fee you may be charged.

Another variable to control is your speed. A study released recently by the Federal Communications Commission says standalone Internet service that delivers 10-25 megabits per second (Mbps) is becoming the standard for the typical family that streams video. Many, however, opt for even higher speeds.

You could be paying for more than you need, or getting less than you expect because the wiring to your home simply cannot deliver.

The bottom line, according to savings expert Andrea Woroch, is do not pay for more speed than you need. Someone who goes online mainly to check email could make it work with a connection of 1 Mbps rather than the typical offering of 10 Mbps or more.

Some of the biggest cable providers are offering “basic” Internet connections for about $15 a month for these light users. The same deal applies for DSL, a slower Internet connection offered by phone companies and delivered over traditional phone lines. Light users will enjoy a decent price compared with those who pay for high-speed broadband, but the trade-off is that they cannot expect to stream movies without frustration or engage in video game battles online.

For those who want to make sure they are getting the speed they are paying for, numerous websites such as SpeedTest.net measure the actual speed of your connection.

If it turns out that you are paying for one speed but are receiving far less, Komando said it is important to go back to your provider and ask for an adjustment.

Vote With Your Feet

The next step is to call the competition, if you have alternate service providers in your area. If you do not, Woroch said it is still worth calling your provider to ask for a lower rate.

If you price out a cheaper plan, you can ask your current company to match it.

If they balk, all the better. The best deals can come from the cancellations department, says Ian Aronovich, 42, of Great Neck, New York.

Aronovich, who runs the website GovernmentAuctions.org, says he first went to Cablevision Systems Corp, his provider, about four years ago and asked for a rate that would match the introductory offer of a competitor. That deal bundled phone, TV and Internet for about $90 rather than the more than $150 he was paying.

After following up yearly to ask for better rates, Aronovich is still receiving about the same discount today—which works out to $29.99 for a high-speed connection with a free router.

MONEY Internet

Want a New Broadband Provider? Google Expands Its High-Speed Internet to 4 More Cities

Google’s newly announced Fiber cities are already territory served by the likes of AT&T and Time Warner Cable.

TIME Internet

Google Fiber Expands Into Southeastern U.S.

Plans for Portland, San Antonio and other cities also in the pipeline

Google’s high-speed broadband service will soon be available to consumers in four metropolitan areas in the Southeastern U.S.

The company announced Tuesday that Google Fiber will soon be available in Atlanta, Charlotte, Nashville and Raleigh-Durham. Since the expansion encompasses the surrounding areas of these metropolitan hubs, Google says it’s technically expanding into 18 new cities total.

Google launched Google Fiber nearly three years ago in Kansas City and has since expanded the service to Austin, Texas and Provo, Utah. Google Fiber offers download and upload speeds of up to one gigabit per second, which the company says is 100 times faster than basic broad speeds, for $70 per month.

The service has mostly been viewed as a way to shame traditional ISPs into boosting their own broadband speeds. A speedier Internet benefits Google because it allows people to execute search queries faster, which lets Google serve users more ads.

Google didn’t offer a timetable for when customers can start buying Google Fiber in the new cities. It has also tapped Phoenix, Portland, Salt Lake City, San Antonio and San Jose as five additional cities where Google Fiber may be rolled out in the future.

MONEY state of the union

What Every Consumer Should Know Before Watching the State of the Union

State of the Union address 2014
Jonathan Ernst—Reuters

A sneak peek at what Obama’s State of the Union ideas could mean for your wallet.

This year, President Obama broke with tradition and started previewing his State of the Union proposals in the two weeks before the big event. He went to Tennessee to talk about community college, to Iowa to talk about broadband, to the Federal Trade Commission to talk about identity theft, and even to LinkedIn, where his senior adviser published his plan about paid time off.

As a result, we already have a pretty good idea of what we’re going to hear Tuesday night—and what it actually means. Here’s MONEY’s take on Obama’s proposals.

1) Obama wants to raise taxes on the rich and give credits to the less-rich; Republicans say, “Yeah, right.”

On Saturday, the White House announced a proposal to raise the capital gains tax from 25% to 28% and close what’s sometimes called the “trust fund loophole.” Obama wants to use the revenue to create a $500 tax credit for families with two working spouses; expand the credits available to families with children; expand the education tax credit for college students; and force businesses without retirement plans to automatically enroll workers in IRAs. Republicans have said this plan is a nonstarter.

While political observers agree that these ideas stand little chance of becoming law, consider this Obama’s opening argument in the coming debate about tax code reform. Read more >>

2) Obama’s broadband plan might just fix the internet.

Think of it as the internet’s “public option.” Some cities, like Chattanooga, Tenn., have much faster internet than the rest of us. That’s because municipalities have built their own broadband networks to compete with internet providers like Comcast and Time Warner Cable, driving prices down and speeds up.

So why won’t your town do the same? Because it’s often illegal—19 states have laws preventing municipalities from creating their own networks. Obama plans to ask the Federal Communications Commission to override these laws. We don’t yet know if the FCC has the authority to do that, but if it does, Obama’s plan could change the way Americans access the internet. Read more >>

3) You already have identity fraud protection tools that are better than the ones Obama proposed.

Obama’s plans to fight identity theft aren’t nearly as ambitious. First, he’ll call on Congress to pass a new law requiring companies to tell you within 30 days if your personal data is exposed. Second, he’ll call on banks and financial institutions to give you access to your credit score for free.

But that won’t do much to protect your money. Most states already have even stricter laws about security breach notifications, and by the time an identity thief has tanked your credit score, it’s way too late. Instead, you’re better off with the tools you already have: chip-and-signature credit cards and free credit reports. Here’s what you can do today to beef up your fraud protection. Read more >>

4) President Obama will push for paid sick leave and paid maternity leave—but look to your city hall instead.

The United States lags behind the rest of the world when it comes to paid time off: 88% of American workers have no paid family leave, 39% have no paid sick leave, and 15% don’t even have unpaid leave. Obama wants to change that, starting with the Healthy Families Act, a bill that would let workers earn up to seven days of paid sick leave. He also wants to sign a memorandum giving federal workers at least six weeks of paid leave after a child is born.

But listen for more details about his third idea, to help states and towns start their own sick leave programs. Local government has been leading the way on this issue: California, New Jersey, and Rhode Island offer paid family leave, and more than a dozen cities have started offering paid sick days. Change seems more likely at the local level, so what specifically does Obama want the federal government to do? Read more >>

5) There’s not much hope for the free community college plan—but that’s okay.

Obama wants to offer free community college to about 9 million students every year. If you think that sounds great, don’t get too excited. Experts say the plan is dead on arrival—it’s too expensive, Republicans will never support it, and community colleges wouldn’t even be prepared for the influx of students. But there are already a ton of ways to take community college classes for free, or close to it. Read more >>

6) Lower mortgage insurance premiums will save homeowners money. But will that really help the housing market?

The Federal Housing Administration plans to lower government mortgage insurance premiums from 1.35% of the loan amount to .85%. That translates to a savings of about $900 a year. The hope is that will encourage more Americans—especially first-time buyers—to enter the housing market. But there are other reasons why this demographic hasn’t started shopping yet. Plus, Republicans are afraid the change could put more homeowners at risk of default. Read more >>

7) Book your trip to Cuba today.

Here’s the rare foreign policy issue with implications for your spring break: Pack your bags for Havana! While the announcement wasn’t part of Obama’s State of the Union “spoiler” tour, Obama is sure to talk about his decision to reestablish diplomatic ties with Cuba—and new travel rules went into effect on Friday.

Starting January 16, you no longer need a special government license to travel to Cuba, and neither do airlines or travel agents. Since the rules have been loosened, prices are expected to fall—but make your plans before demand picks up. Read more >>

TIME technology

Inside Obama’s Net Neutrality Power Play

President Barack Obama’s decision to call for the strictest regulation of consumer broadband Internet is the result of months of internal White House debate over how to push the Federal Communications Commission to propose stronger Open Internet rules, government and industry insiders familiar with the process tell TIME. The Monday announcement comes days before an FCC deadline on the issue.

Obama’s surprise statement reverberated across the worlds of policy, business and technology, and appeared to shift the momentum in the long-running war over the future of the Internet. It drew a defensive response from FCC Chairman Tom Wheeler, drove down cable stocks, and juiced the debate between Open Internet advocates and the nation’s biggest cable and phone companies, like Comcast, Verizon and AT&T.

The question now is whether it will be enough to shift Wheeler and the FCC off their current, more cable-friendly path ahead of a deadline next week for the commission to publish revised rules for consumer broadband Internet. The revised rules would need to be published by Nov. 19 in order for the FCC to vote on them at an upcoming December meeting.

Obama’s statement is a shot across the bow for Wheeler, a former telecom lobbyist and one of the president’s top fundraisers in 2008 and 2012. For the last year, Wheeler has resisted proposing Open Internet rules that would prevent broadband service providers from collecting fees from content companies in exchange for special access to Internet users—an arrangement formally known as “paid prioritization,” but often dismissed pejoratively as “Internet fast lanes.”

The FCC’s latest rules, proposed in April, were widely panned by Open Internet advocates, including powerful Internet companies, like Google, Amazon, and eBay, for allowing for such paid prioritization agreements.

Over the last six months, Obama has increasingly distanced himself from Wheeler and the FCC’s proposed rules. In May, the White House said only that it would “carefully review [the FCC’s] proposal…in hopes that the final rule stays true to the spirit of net neutrality.” But by October, Obama’s rhetoric was almost impatient.

“My appointee, Tom Wheeler, knows my position,” he said during a speech in California on Oct. 10. “I can’t—now that he’s there, I can’t just call him up and tell him exactly what to do. But what I’ve been clear about, what the White House has been clear about is, is that we expect whatever final rules to emerge to make sure that we’re not creating two or three or four tiers of Internet. That ends up being a big priority of mine.”

Two weeks after Obama’s October speech, Wheeler floated another idea for regulating consumer broadband: a “hybrid approach” that would be slightly stricter on broadband service providers but still allow for paid prioritization agreements. The proposal was again panned by Open Internet advocates for allowing Internet fast lanes while calling them something else.

Frustration with Wheeler’s apparent unwillingness to ban paid prioritization altogether spurred some White House aides to encourage the president to take a more active role in the debate, sources who have been involved with the process tell TIME. For the last several months, Obama and his staff have been studying all of the options available to the FCC to protect an open Internet, according to a White House official.

Tim Karr, who works with Free Press, an Open Internet advocacy organization, said that Obama’s choice to make such a bold proclamation now—just a week after the mid-term elections put Democrats on the defensive—is a powerful signal that his administration will be “willing to take bold executive actions even in a lame duck role.”

It’s also an indication of the influence of the so-called Internet community, which gained political prominence after successfully overturning the SOPA/PIPA legislation in 2011 and, this year, flooding the FCC with four million comments on its proposed rule. “[P]hones have been ringing off the hook at the White House for weeks,” wrote Craig Aaron, the president and CEO of Free Press in a statement.

The White House’s announcement Monday, which took the form of both an open letter and a video, calls on the FCC to reclassify consumer broadband service under Title II of the Telecommunications Act—a move that would give the FCC explicit legal authority over Internet service providers and that most Open Internet advocates say is necessary in protecting future Open Internet rules from inevitable court challenges from the telecom industry. In January, a federal appeals court threw out the FCC’s previous net neutrality rule on the grounds that the agency did not have the legal authority to regulate broadband Internet.

On Monday, Wheeler responded to the White House’s call with a rather defensive note, pointing out that the FCC is an independent agency, before launching into a long explanation of the legal complexity posed by reclassifying consumer broadband services under Title II.

The sentiment was echoed by big Internet service providers, Republican lawmakers, and anti-regulatory advocates, all of whom argued that classifying broadband Internet under Title II is a “nuclear option” that will destroy innovation and undercut private sector investment in Internet infrastructure.

“Reclassification under Title II, which for the first time would apply 1930s-era utility regulation to the Internet, would be a radical reversal of course that would in and of itself threaten great harm to an open Internet, competition and innovation,” a Verizon spokesperson said in a statement.

Comcast vice president David Cohen was similarly alarmed. “To attempt to impose a full-blown Title II regime now, when the classification of cable broadband has always been as an information service, would reverse nearly a decade of precedent, including findings by the Supreme Court that this classification was proper,” he said in a statement.

Senator Mitch McConnell (R-Kentucky), who is expected to become the Senate Majority Leader next year, House Speaker John Boehner (R-Ohio), and House Majority Leader Kevin McCarthy (R-California) all published statements warning that Title II was a mistake. “The Commission would be wise to reject it,” McConnell said.

“Today’s proposal is a step backward and would slow innovation if implemented,” said Mike Montgomery, the executive director CALinnovates, a San Francisco-based coalition that works on public policy in technology. He added that while “protecting consumers and innovation is a noble cause… we should be creating new laws to deal with new technologies.”

Meanwhile, Open Internet advocates pooh-poohed such concerns. “We are looking for rules that are not burdensome to the Internet’s users,” said Michael Beckerman president and CEO of the Internet Association, an advocacy group that represents Amazon, Facebook, AOL, Netflix, and dozens of other large Silicon Valley firms. “We want to ensure that you don’t need to hire a lawyer or pay a fee” to ensure that your content is reaches all Internet users equally.

Beckerman also warned that while a bit of celebration is in order, the biggest battles—getting the FCC to actually write strong rules—have yet to be fought. “Even if the FCC reclassifies consumer broadband service under Title II, the resulting rules could still allow for paid prioritization agreements,” he said. “We’ll be watching the details closely.”

Read next: All Your Questions About Obama’s Internet Plan Answered

TIME broadband

Report: You Could Be Overpaying For Your Data Plan

GAO Report Data Usage
Bloomberg via Getty Images An iPhone 5 streaming video from Netflix during a demonstration of the new Google ChromeCast at an event in July 2013.

Internet providers are swapping their unlimited data plans for usage-based plans on both mobile and at-home Internet, but consumers aren't aware of how much data they're burning up

Lost amidst usage-based pricing and ISPs, MBs and GBs, many U.S. customers are unaware of just how much data they consume, and they are in turn purchasing plans with unnecessarily robust allowances, according to a new report.

The findings come by way of a preliminary report released Tuesday by the U.S. Government Accountability Office (GAO). The GAO conducted a survey about usage-based plans (UBPs), in which consumers pay for a capped amount of data. Such plans are offered by various Internet service providers (ISPs) of wireless and wireline (e.g. at-home broadband) services, including AT&T and Comcast, among others. Consumer focus groups and interviews with top ISPs and industry experts revealed that customers may tend to overestimate data usage of common activities, or on the other hand, underestimate usage and unknowingly exceed data caps.

One wireless provider interviewed by the GAO indicated that only a small percentage of users are on 500 megabytes-per-month or smaller data plans, while half of North American wireless customers use fewer than 102 megabytes per month, according to a report by ISP research firm Sandvine.

Additionally, all wireless ISPs interviewed and over half of wireline ISPs surveyed by the GAO offer usage-based plans to various extents. Users who exceed their data caps on such plans can be fined up to $15 per 1GB of additional data or experience throttled-down connection speeds. An AT&T spokeswoman told TIME 97 percent of the company’s DSL customers don’t exceed their monthly data plan, but Sandvine’s report suggests that more customers will do so in the future, as cord-cutting users depending on the Internet as a TV replacement are already consuming roughly 212 GB of data per month, close to many existing data allowances.

But even users with unlimited wireline plans are subject to restrictions, especially if they’re consuming massive amounts of data.

“Last year we discovered a small number of residential customers [of Verizon’s un-capped Internet plan] consuming many terabytes of data each month with their home connections – far exceeding usage levels ever intended for Verizon’s home broadband service,” a Verizon spokesman told TIME in an e-mail. “To put this in context and just for example, these are customers who would have to watch over 4,000 hours, or 166 days-worth of non-stop HD movie viewing over a month’s time to equal their usage levels.”

Verizon—which does not have wireline broadband caps—subsequently requested those customers to move to a business grade service, a move that could be seen as generous, considering some ISPs are slashing unlimited at-home Internet altogether. Verizon came under fire in March when a spokesman inadvertently suggested it would cap its FiOS fiber broadband service, before later posting that it was a miscommunication. In 2011, AT&T implemented monthly limits for its home broadband subscribers. Recently, Comcast announced that it may roll out a wireline data plan with monthly allotments, a suggestion that’s facing harsh criticism as ISPs claim non-unlimited wireline plans may be more fair.

“Explosive Internet use has driven the need for broadband allotments to continue to invest in a sustainable network,” an AT&T spokeswoman told TIME. A Comcast spokesman confirmed to TIME that the company believes the capped approach is more flexible, allowing those who use more broadband can pay more, and those who use less can pay less.

The GAO report indicated that customers had “strong negative reactions” to usage-based pricing on wireline Internet plans. Though the preliminary findings didn’t elaborate on specific reasons for consumers’ harsh reactions, the congresswoman who requested the report—California Democrat Anna Eshoo—warns that capped Internet plans could discourage users from watching Netflix and Amazon Prime, thus encouraging customers to subscribe to more expensive cable TV packages offered by the very same companies potentially switching to capped Internet plans.

“Data caps, particularly when they’re applied discriminatorily, could have the same damaging effect on the free and open Internet as we know it,” Eshoo told the National Journal.

The consumers surveyed by the GAO, however, expressed fewer negative sentiments to wireless mobile plans with usage-based pricing, a trend that’s grown increasingly popular as wireless providers drop unlimited mobile data plans. Major players like AT&T have taken that leap, cutting its unlimited mobile data plan offerings to new customers in 2010 while marketing the change as one that would save customers money. Reports have estimated that 44% of AT&T’s customers are still grandfathered into the unlimited data plans—potentially a lot of overpaying customers, if not all are big data users.

Still, the unlimited wireless data plans that remain on the market are laced with fine print. Sprint and Verizon, two wireless providers that haven’t eliminated their unlimited mobile data plans, announced in May and July respectively they would throttle speeds for some unlimited data plan holders, a sort of data “prioritization,” as Sprint called it. These are among the “loopholes” customers fear their providers will use to overcharge them, according to the GAO report. Still, most customers’ understanding of their basic data use remains clouded, the GAO report suggests.

So just how much data does certain activities use? Online shopping and general surfing is one of the least data-heavy activities, contrary to popular belief, according to the GAO’s report. Meanwhile, video streaming like Netflix is known to be a data hog.

Here are a few wireless data consumption estimates for common smartphone activities to keep in mind:

Smartphone Data Consumption
AT&T
TIME technology

Comcast, AT&T Say They’re Not Big Enough Yet

Comcast
Bloomberg—Bloomberg via Getty Images The Comcast Corp. logo is seen as Brian Roberts, chairman and chief executive officer of Comcast Corp., right, speaks during a news conference at the National Cable and Telecommunications Association (NCTA) Cable Show in Washington, D.C., U.S., on Tuesday, June 11, 2013.

At a Senate hearing ahead of major merger melees

Two of the biggest players in the telecom industry faced off against a public interest group, a trade group and a satellite company at a Senate hearing Wednesday in a debate that will help set the stage for upcoming battles over the future of broadband, television and streaming video.

The hearing comes just as federal regulators are staffing up to review two mammoth mergers: One between Comcast and Time Warner Cable, and another between AT&T and DirecTV. To some degree, the hearing was only ceremonial: Congress won’t have any direct say over whether federal regulators approve or deny the mergers. But political winds in Washington can affect regulators’ moods, and the back-and-forth gave members of the Senate Committee on Commerce, Science and Transportation a chance to publicly speak their minds on the mergers.

While the discussion at the hearing was unflaggingly respectful, it touched, just below the surface, on what has become a fiercely ideological war with regard to the future of TV, with each side presenting a vision incompatible with the other’s.

Comcast and AT&T argued that massive consolidation in the telecom industry is good for consumers, good for innovation, and good for the free market. They warned that if the government does not allow the mergers to go through, incumbent telecom companies would no longer be able to invest in basic Internet infrastructure, leaving consumers to pay more for fewer Internet and TV options.

Representatives from advocacy group Public Knowledge, a TV writer’s guild, and satellite TV company Dish made the opposite case. They said that recent consolidation in the telecom industry has been terrible for consumers, driven up prices and driven down the quality of customer service. They also said the lack of competition has squashed innovation and investment in broadband infrastructure.

At the center of the discussion was Americans’ shifting TV-viewing habits. When Americans want to watch TV, they’re increasingly bypassing traditional set-top boxes, instead opting for their smartphones, tablets, and laptops. Online video consumption grew by 71% in the U.S. between 2012 and 2013, according to Nielsen.

That trend has been the driving force behind skyrocketing broadband subscriptions—a major cash cow for cable companies and for telecom companies that offer services faster than DSL. AT&T’s revenue from its U-Verse high-speed broadband business was up 29% from last year according to a recent quarterly report, for example. Comcast, which already has more than 21 million broadband subscribers, says the broadband business is one of its fastest-growing offerings.

That so many Americans are streaming more video online has also made online TV and video content companies, like Netflix, YouTube and Vimeo, fundamentally dependent on telecom companies’ pipes to reach customers. Public Knowledge’s Gene Kimmelman argued that no online video streaming company can exist without going through broadband providers like AT&T and Comcast, whose services are necessary to deliver streaming content to consumers. That sets up a potential problem, as Comcast could be incentivized not to carry Netflix or YouTube content as quickly as its own video offerings (Comcast owns NBCUniversal, a major content production company).

“Everyone who wants to make the online video system works needs to make a deal with Comcast,” he said.

Also addressed during the hearing was many Americans’ frustration at having to pay large bills for pay-TV—bills that have risen faster than inflation—to receive hundreds of channels. The non-profit consumers rights group, Consumers Union, has said that at least two-thirds of pay-TV customers [PDF] would prefer to pay less for a handful of programs that they actually watch. The disconnect between these two methods—known as “bundling” versus “a al carte”—is at the heart of the future of online video.

“The younger generation doesn’t want to spend $120 for 500 channels,” said Jeffrey Blum, a senior vice president of Dish, the second-largest satellite company in the country after DirecTV. But fixing the problem, he said, requires going up against incumbent telecom companies, like Comcast, AT&T and Verizon, which rely on bundling to underwrite their pay TV services, and would lose out if most Americans simply cut their pay-TV bill and began streaming shows online. Popular networks like ESPN would also lose out; in the current system, the telecom companies pay them large fees to redistribute their content.

Still, Blum said, there is already “too much power in the hands of too few” in the broadband space. A combined Comcast-Time Warner Cable “will have the incentive and ability to stifle competition,” he said.

Both Cohen and AT&T’s senior executive VP John Stankey dismissed concerns about anticompetitive behavior. In previous testimony before Congress, Comcast’s executive VP David Cohen has said that the merger between Comcast and Time Warner Cable will not affect competition since the companies do not currently compete in any geographic region, and that Comcast has “only to gain” from more people streaming video online. The more demand there is for online video, “the more demand there is for our broadband service,” he said at a previous hearing.

In February, Comcast made a bid to buy Time Warner Cable for $45 billion; in May, AT&T’s bid for DirecTV was worth $48.5 billion. Neither deal has yet to pass regulatory muster.

Both Cohen and Stankey also reiterated their companies’ commitment to the Federal Communication Commission’s now-defunct rules on “net neutrality,” the notion that broadband providers treat all content that passes over their pipes equally. While both expressed their opposition to some public interest groups’ hopes that the telecom industry would be recategorized as a “Title II” industry, giving the FCC much more regulatory control over broadband, they said they supported the FCC’s newly proposed net neutrality rules.

Those rules have come under fire because they allow broadband companies to redirect some content to a “fast lane,” while relegating most content to a slower, regular lane. Cohen said that while he “didn’t understand” what “fast lanes and slow lanes” even were, he said it was a non-issue. “We don’t have any,” he said. “We don’t have any plans to develop any.”

TIME Technology and Media

Netflix Will Stop Shaming Verizon on Streaming Speeds

Netflix Ends Messages Blaming Verizon
Bloomberg—Getty Images The logo of Netflix, the biggest driver of Internet bandwidth, is displayed on an iPhone.

Company still maintains that Verizon is to blame for slow buffering

Netflix said Monday it would stop displaying a message that blames Verizon for slow buffering speeds, five days after Verizon issued a cease and desist letter.

The streaming service still maintains that Internet providers are to blame for slow speeds. But the company said in a blog post that the “small scale test” in which it told consumers about that on screen will stop June 16 while Netflix evaluates “rolling it out more broadly.”

“Some broadband providers argue that our actions, and not theirs, are causing a degraded Netflix experience,” the company said. “Netflix does not purposely select congested routes. We pay some of the world’s largest transit networks to deliver Netflix video right to the front door of an ISP. Where the problem occurs is at that door — the interconnection point — when the broadband provider hasn’t provided enough capacity to accommodate the traffic their customer requested.”

Though Netflix inked a deal with Verizon to improve streaming speed in April, the public finger-pointing set off a public relations battle between the two companies. And Netflix published of an ISP Speed Index that lists Verizon delivering content at the lowest speeds in the U.S. Netflix says the Index is intended to inform users of their Internet speeds, but the messages that followed—“The Verizon network is crowded right now”—led Verizon to cry foul and dismiss it as a “PR stunt.”

“There is no basis for Netflix to assert that issues with respect to playback of any particular video session are attributable solely to the Verizon network,” Verizon said in the cease and desist letter. “As Netflix knows, there are many different factors that can affect traffic on the Internet.”

TIME Net neutrality

8 Things You Should Know About Net Neutrality

Federal Communications Commission Proposes New Open Internet Rules Tom Wheeler
Alex Wong—Getty Images Federal Communications Commission (FCC) Chairman Tom Wheeler listens during a news conference after an open meeting to receive public comment on proposed open Internet notice of proposed rule-making and spectrum auctions on May 15, 2014 at the FCC headquarters in Washington.

As the Open Internet debate intensifies, here's a guide to the FCC, net neutrality, and what's at stake for the future of the Internet

For many years, net neutrality was a relatively obscure policy topic that mostly preoccupied phone and cable companies, D.C. telecom lawyers, Open Internet activists and a handful of tech firms and startups. Compared to major national issues like the economy, national security, healthcare and immigration, net neutrality barely registered a blip on the American consciousness.

Those days are over.

Over the last three weeks, net neutrality has become front page news across the country, after a U.S. plan to update its Internet regulations was leaked to the press. The Internet exploded in commentary, tens of thousands of people called and emailed the FCC, the nation’s largest Internet and broadband companies weighed in, dozens of U.S. lawmakers registered their views, and protestors established an encampment outside the FCC’s D.C. office.

On Thursday, the FCC passed a crucial hurdle advancing the public comment process that will ultimately lead to new net neutrality rules. Four demonstrators had to be dragged away after disrupting the proceedings. Let’s take a take a step back and examine what this whole kerfuffle is about.

1. What is net neutrality?

Net neutrality is the idea that the Internet should be an open platform, and broadband companies shouldn’t be able to interfere with your right to access content and services online. Another way of putting this is that broadband giants like Comcast, Verizon, and AT&T shouldn’t be able to block or discriminate against certain content — especially rival content — as it enters your home and reaches your computer.

Net neutrality advocates believe that all Internet users should have unfettered access to the Internet, just like all Americans have the right to travel anywhere in the 50 states without a passport. Without this open access, which many Internet users take for granted, startups like Google, Twitter and Facebook might never have flourished, net neutrality advocates argue.

2. Why is net neutrality important now?

The FCC’s net neutrality policies have been in limbo since a federal court struck down most of the agency’s 2010 open Internet order in January. That order prohibited broadband providers like Comcast and Verizon from blocking traffic like Skype or Netflix or putting them into an Internet “slow lane.”

Without such protections, net neutrality advocates fear the Internet could turn into a two-tiered system — or worse, something akin to cable TV with premium bundles and packages.

3. What is the FCC and what does it do?

The Federal Communications Commission is an independent federal agency overseen by Congress that regulates all communications “by radio, television, wire, satellite and cable” throughout the country. As such, the FCC has broad regulatory authority over corporate giants like CBS, AT&T, Comcast, DirectTV, among many other companies. The agency is also responsible for managing the nation’s wireless spectrum — the radio airwaves that make our smartphones and tablets connect to each other and the Internet.

In recent years, the FCC has increasingly focused on Internet access, both wired and wireless, which has become a crucial communications medium. Among the most important FCC mandates are promoting competition, innovation and media diversity in order to advance the public interest. The FCC is an independent agency, which means the White House can’t tell it what to do.

4. How is the FCC organized?

The FCC is led by five commissioners who are appointed by the president and confirmed by the Senate for five-year terms. The president appoints one of the commissioners to be chairman of the commission, which is usually split along party lines 3-2, depending on who is in the White House. Historically, the FCC chairman has had broad power to determine the agenda’s agency.

The current FCC chairman is Tom Wheeler, a Democrat and former venture capitalist who served as the top cable and wireless lobbyist two decades ago, and raised hundreds of thousands of dollars for Obama’s presidential campaigns. The two other Democratic commissioners are Mignon Clyburn, a former public official from South Carolina, and Jessica Rosenworcel, a lawyer and former senior Senate staffer. The two Republican commissioners are Ajit Pai, a former senior FCC official and Michael O’Rielly, a former senior Congressional staffer.

5. What just happened?

On Thursday, the FCC approved what’s called a “notice of proposed rulemaking” (NPRM) on party lines making Wheeler’s draft open Internet proposal available for public review, and triggering four months of public comment. The proposal seeks public input on the best way to ensure the Internet stays open, and to prevent broadband companies from blocking or discriminating against rival services, especially startups, potentially harming innovation.

Wheeler’s draft opens the door to so-called “paid prioritization,” in which broadband providers could strike special deals with Internet companies for preferential treatment. Commissioners Clyburn and Rosenworcel both oppose such special deals, and offered their views in statements on Thursday. Commissioners Pai and O’Rielly oppose regulating the Internet-based on free-market principles and said as much in their own statements.

6. Why are net neutrality advocates upset?

Open Internet advocates argue that strong net neutrality rules are essential in order to ensure that the Internet remains the open, dynamic platform that has spawned a generation of technological innovation and generated billions of dollars in economic growth — much of it coming from tech startups. As a presidential candidate, Obama famously declared that he would “take a backseat to no one in my commitment to network neutrality,” and vowed to appoint FCC commissioners who felt the same way.

Many net neutrality advocates feel burned by Obama. And they weren’t amused when he chose Wheeler, who once served as a top industry lobbyist, as president of the National Cable Television Association (NCTA) and later as CEO of the Cellular Telecommunications & Internet Association (CTIA), to be FCC chairman. Wheeler insists he supports open Internet principles, but many net neutrality advocates are still skeptical. “Tom Wheeler spoke passionately about the open Internet, but his rousing rhetoric doesn’t match the reality of his proposal,” says Craig Aaron, president and CEO of Free Press.

7. Why are broadband providers and their allies upset?

Net neutrality advocates want the FCC to reclassify broadband companies under the Title II “common carrier” provisions of the Communications Act that have governed traditional phone companies for decades. Such reclassification, which Wheeler says he’s considering, would subject the broadband companies to tighter regulation. The broadband giants oppose such reclassification with every fiber of their being.

“Reclassification of broadband Internet access offerings as Title II — telecommunications services would impose great costs, allowing unprecedented government micromanagement of all aspects of the Internet economy,” twenty-eight CEOs including Lowell McAdam of Verizon, Randall Stephenson of AT&T, Robert Marcus of Time Warner Cable, and Brian Roberts of Comcast, wrote in a letter to the FCC. “Under Title II, new service offerings, options, and features would be delayed or altogether foregone. Consumers would face less choice, and a less adaptive and responsive Internet.”

8. How will the process work moving forward?

The FCC vote to approve the NPRM triggered a four-month comment period for the public to weigh in: 60 days (until July 15) to submit initial comments and another 57 days (until September 10) for reply comments. The agency is seeking input on several crucial questions including whether the FCC should prohibit paid prioritization completely, whether the new rules should apply to mobile broadband service, and whether the agency should reclassify broadband service under Title II “common carrier” principles.

The FCC has encouraged the public to participate in the process. Interested parties can submit their comments here, or at Docket 14-28: “Protecting and Promoting the Open Internet.” Recent public comment filings can be found here. Email comments are also accepted at openinternet@fcc.gov. (Remember, you’ll be filing a document into an official FCC proceeding, and any information submitted, including names and addresses, will be publicly available via the web.)

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