Say It Ain’t So Joe Nocera

The New York Times’ indispensable business reporter, Joe Nocera, slipped in a story about net neutrality just before the long holiday weekend. The normally dependable Nocera—he’s been completely vigilant in his reporting on the financial crisis—really lost his way in his “Struggle For What We Already Have.”

Maybe his Labor Day celebration started a little earlier or our unusually cool late summer weather in the NYC-metro area put him into a more generous state of mind. For whatever reason, his reading of Google’s recent net neutrality proposal as completely benign is not worthy of his reporting.

He got a few things really wrong. One, there was no mention of Google-Verizon’s Advanced Services— the private Internet. Two, the language for non-discrimination in the Voozle contrivance was intentionally weakly worded, and this was not, as he implied, an issue only for the idealistically pure. Three, cable television is not really the model for the Internet, and, um, there actually is non-discrimination language in the relevant Title VI statutes, forced on the cable providers by angry consumers and content providers.

I guess Nocera got me a little upset.

I was hoping to devote the Labor Day weekend to enjoying the waning days of summer rather than focusing on packet prioritization, Android 2.2, Samsung Galaxy Tab, and semantic web. Unfortunately, I read Nocera’s article late Friday, and it left an awful taste, like those really bad french fries you get at a beach concession stand.

I’ve addressed my gripes with the Voozle’s non-discrimination wording and their call for a walled off Internet in earlier posts. I guess I was most teed of when Joe flitted around the idea that cable television is not really net neutral and it doesn’t bother anyone. Or as he put it, “television distributors make decisions all the time about what people can see and how much they pay for it….and nobody seems to view this practice as a crime against humanity.”

I agree none of this is a crime against humanity, but our law makers and various business interests (broadcasters, satellite companies, state and local authorities, and the cable system owners) spent a lot of time and money back in the early 1990s battling over a new legislative framework for cable video. I’m referring to the Cable Television Consumer Protection and Competition Act of 1992, a piece of reform legislation driven by television programmers and networks, those innocent net neutrality evangelists.

First a little ancient history. After living under the pro-cable industry Cable Policy Act of 1984 (kind of like what Voozle is proposing), consumers groups faced with rising subscriptions rates coupled with poor service and video distributors (read content providers) struggling to gain access to the cable network forced Congress to “reregulate” the cable industry. In other words, the pitchfork-holding villagers (and I include in this metaphor angry pro-business store owners) were getting more than a little perturbed with the anti-competitive practices of the cable companies.

The result was the 1992 reworking of the Title VI statutes covering the cable business. How bad were things? In summing up the business environment, the legislation’s preamble notes that “The result is undue market power for the cable operator as compared to that of consumers and video programmers.” Bad.

The 1992 law called for—and I know this is an unpopular regulatory word—obligations to be imposed, including the requirement of cable systems to carry local television as well as non-profit educational stations, which was (naturally) challenged but ultimately upheld in the courts.

To address broadcasters complaints that the cable companies favored affiliated programmers—those that the cable providers have a financial interest in—Congress asked the FCC to come up with non-discrimination regulations (see section 616, Title VI)

to prevent a multichannel video programming distributor from engaging in conduct the effect of which is to unreasonably restrain the ability of an unaffiliated video programming vendor to compete fairly by discriminating in video programming distribution on the basis of affiliation or nonaffiliation of vendors in the selection, terms, or conditions for carriage of video programming provided by such vendors;

Forget about pesky consumers,who received some relief from this legislation through regulation of basic cable rates, it was the video content providers that were most enraged by the business practices of the cable monopolists. Though some of the Act’s more stringent conditions were later overturned in the courts, the guts of the thing remained: non-affiliated content providers should have non-discriminatory access to the cable network.

This 1992 Act went even further in leveling the playing field by constraining the cable operator’s vertical monopoly. New language in Title VI (see section 628) now required service operators’ affiliated programmers to make their content available to cable and satellite competitors on the same terms and conditions. It severely restricted exclusive anti-competitive contracts.

And I won’t even go into the copyright claims of broadcasters, which are still a contentious issue. As Nocera fliply said, you don’t want to know the details.

If some of this cable history is sounding eerily familiar— content producers vs. infrastructure owners, exclusionary agreements, and even copyright claims—that’s because it is. The role of the video programmers are now played by the likes of Facebook, Twitter, eBay, and Hulu. The consumer part is still being played by the same folks.

There’s really no need to repeat history with a light-regulatory (or as some would put it, regulatory capture) approach to broadband. This time the stakes are much larger. However, as before consumers, content providers, and all those new startups I’ve been writing about will have to struggle for what we currently don’t have.