Testimony of Before the Regarding

Timothy P. Karr, Campaign Director, Free Press Council of the City of New York Network Neutrality Resolution No. 712-A November 20, 2009

Free Press is grateful for the opportunity to testify before the New York City Council today. As public advocates, we strongly support policies that protect the Internet’s fundamental openness.1 We are greatly encouraged that the Council is taking the lead on the vital issue of Net Neutrality and are supporting efforts in other cities to follow your example. To that end, on Tuesday afternoon we asked Free Press members from New York City to send a note to Congress about the City Council’s efforts. In little more than 48 hours, more than 4,200 New Yorkers put their names on a letter that “applauds the City Council for considering this resolution” and calls on Congress to stand behind a strong Federal Communications Commission (FCC) ruling. I am delivering a copy of their signatures to the Council with my testimony. The FCC is weighing a Net Neutrality rule that will determine whether the Internet will remain a tremendous engine for free speech, innovation and equal opportunity.2 There is a great deal of passion surrounding this issue as much is at stake for the tens of millions of Americans who rely upon the Internet every day. Despite the debate, I don't believe anyone on today’s panels or in this room would dispute these two notions: First, over the past 40 years, the Internet has emerged as an unprecedented tool for: spreading innovative ideas, increasing public participation in our democracy, and fostering economic opportunity, even in the most overlooked communities.


Free Press is a national, nonpartisan, nonprofit organization with 450,000 members working to increase informed public participation in crucial media and communications policy debates. 2 Timothy Karr. “FCC Fine Print Could Undermine an Open Internet,” SavetheInternet.com, November 2, 2009. http://www.savetheinternet.com/blog/09/11/02/fcc-fine-print-could-undermine-open-internet

Tim Karr NYC Council Testimony - Nov 2009


Second, I don't believe that we would disagree that we need sound public policies to encourage faster, more open and affordable Internet access for everyone in the country. The right policies will continue to advance the most democratic communications technology ever devised. The wrong policies will jeopardize this openness and hasten the decline of U.S. broadband services relative to other developed nations. 3 We need to pass the right policies right now. The last time I testified for Net Neutrality here, in April 2007, we faced a White House and FCC that was held captive to the interests of the powerful phone and cable lobby, and therefore hostile to the notion of Net Neutrality rules. But a lot has changed in the last two-and-a-half-years: We have a new President who has repeatedly pledged “to take a back seat to no one in [his] commitment to Net Neutrality.” President Obama appointed the principle architect of his Net Neutrality agenda, Julius Genachowski, to head the FCC.4 House Speaker Nancy Pelosi and House Commerce Committee Chair Henry Waxman are outspoken supporters of the FCC’s efforts to pass a strong Net Neutrality rule. And, perhaps most importantly, more than 1.6 million people across the country have written or called their elected representatives urging their support of Net Neutrality. Unfortunately, though, a lot has stayed the same, too: In the first three quarters of 2009, AT&T, Comcast, Verizon, and their trade groups spent nearly $75 million and hired more than 500 lobbyists to discredit the public push for an open Internet.5 And that's just the money we know about. They have also funneled untold sums to phony front groups, coin-operated think tanks and populist-sounding PR campaigns. As we’ve seen with the health care and global warming debates, any effort at reform will come under a relentless assault from deep-pocketed institutions that prefer the status quo.6 The money against Net Neutrality is being spent to lock in incumbent control in America. The present phone and cable duopoly provides 97 percent of fixed broadband connections into American homes. As high-speed Internet becomes more prevalent – and as users start to use their connections to create and share more media – these companies are moving rapidly to reverse-engineer the openness that’s become the hallmark of the Internet.
3 4 5

S Derek Truner, “One Nation Online,” Free Press. July, 2008. http://freepress.net/files/OneNationOnline.pdf

“Barack Obama on Net Neutrality,” November 14, 2007, BarackObama.com http://www.youtube.com/watch?v=g-

mW1qccn8k The Senate Office of Public Records [Tthe Lobbying Disclosure Act Database] 6 Timothy Karr, “Washington’s Astroturf Economy,” Internet Evolution, November 16, 2009. http://www.internetevolution.com/author.asp?section_id=856&doc_id=184685&

Tim Karr NYC Council Testimony - Nov 2009


The Internet's True Marketplace of Ideas The history, however, is clear. The Internet was born in a regulatory climate that guaranteed strict nondiscrimination. Internet pioneers like Vinton Cerf and Sir Tim Berners-Lee always intended the Internet to be an open and neutral network.7 And nondiscrimination provisions have governed the nation's communications networks since the 1930s. Originally with the Internet, the physical wires were regulated separately from the content flowing over them. The reason for this was simple: to keep monopoly owners of infrastructure from using their power to distort the Web’s free market.8 This “common carriage” protection worked brilliantly. For two decades, the Internet thrived with low barriers to entry, equal opportunity and consumer choice. The Internet became a competitive market in its truest form. Under Net Neutrality: grad students working out of their dorm room created Google; a Pez hobbyist conceived the idea for eBay; An Israeli teenager wrote the code for Instant Messaging. The open Internet has allowed the crusaders at ColorofChange.org to transform themselves from an idea about racial justice in the 21st century to a political powerhouse with hundreds of thousands of online supporters.9 All of these success stories have shown us that innovation -- both political and economic -- thrives in an open online marketplace where ideas rise and fall on their own merits.10 Remove Net Neutrality, and this marketplace tilts in favor of the network owners. Ask yourself this simple question: What have companies like AT&T, Comcast and Verizon contributed to the culture of openness upon which a free-flowing Web depends? The End of Neutrality? After intense corporate lobbying, the FCC pulled the carpet from beneath this marketplace of ideas, in 2005 removing the nondiscrimination protections that guaranteed Net Neutrality. Soon after, the top executives of phone and cable companies announced their intention to change the Internet forever. In the pages of the Washington Post, BusinessWeek, Wall Street Journal and in reports to shareholders, they spoke of plans to become the Internet's gatekeepers and begin discriminating against content that doesn't
Sir Tim Berners-Lee, “Net Neutrality: This is Serious,” TimBL’s Blog, June 21, 2006. http://dig.csail.mit.edu/breadcrumbs/node/144 8 S. Derek Turner, "The Revolution Will Not Be Streamed," in Changing Media: Public Interest Policies for the Digital Age. Free Press. May 2009. Pages 11-22. 9 James Rucker, “Net Neutrality Amplifies Vital Voices of African Americans,” SavetheInternet.com, October 21, 2009. http://www.savetheinternet.com/blog/09/10/21/net-neutrality-amplifies-vital-voices-african-americans 10 Professor Lawrence Lessig. "Testimony of Lawrence Lessig on 'Network Neutrality'," February 7, 2006 at a Full Committee Hearing of the Senate Committee on Commerce, Science and Transportation. http://www.aei-brookings.org/admin/authorpdfs/page.php?id=1254

Tim Karr NYC Council Testimony - Nov 2009


generate extra income for them.11 In 2007, the largest Internet cable provider, Comcast, began secretly blocking its customers’ access to certain file-sharing applications. Despite an FCC sanction the cable provider still denies the FCC’s authority claiming the right to do block access and degrade users’ connections with impunity.12 What these executives were proposing -- and in Comcast’s case implementing -- was a scheme to control their customers’ clicks. The problem, of course, is that they had to undercut the Internet’s very democratic nature to do so. This scheme would mark a fundamental shift in the neutral way the Internet has always worked. In essence, it takes away the most basic and crucial tenet of the Internet -- a user's freedom to innovate without asking anyone’s permission. It tips the Web’s even playing field to favor larger corporations, while handicapping the Internet’s true innovators: outsiders and startups who can't afford to buy in to this protection racket. This is a disaster for users and producers of Internet content. The egalitarian Internet is far too valuable and far too successful to be sacrificed to create dubious streams of new revenue for a highly profitable cartel of cable and telephone giants. Internet Policy: Who Benefits? Some will argue before you today that the Internet has prospered free of regulation. This is a red herring.13 The Internet has always had baseline consumer protections written into law. The real question isn't: "Should we regulate the Internet?" Without forward thinking broadband policies, America’s economy will suffer.14 The real question should be: "For whom do we create this policy?" The phone and cable companies have held Washington's policymaking process in their

See for example: “At SBC, It’s All About ‘Scale and Scope’,” BusinessWeek Online, November 7, 2005; Jonathan Krim, “Executive Wants to Charge for Web Speed,” Washington Post, December 1, 2005; Dionne Searcey and Amy Schatz, “Phone Companies Set Off a Battle Over Internet Fees,” Wall Street Journal, January 6, 2006; Timothy Karr, "AT&T's New Boss Wants Your World Delivered to Him," Huffington Post, April 27, 2007. 12 Jordan Golson & Stacey Higginbotham, "Comcast Lawsuit Questions FCC Right to Enforce Net Neutrality," GigaOm, August 12, 2009. http://gigaom.com/2009/08/12/comcast-lawsuit-questions-fcc-right-to-enforce-netneutrality/ 13 S. Derek Turner. “Digital Déjà Vu: Old Myths about Net Neutrality,” Free Press. October 1, 2009. http://freepress.net/files/dejavu.pdf 14 Richard Hoffman. “When It Comes To Broadband, U.S. Plays Follow The Leader,” InformationWeek, 15 Feb 2007. http://www.informationweek.com/story/showArticle.jhtml?articleID=197006038. ALSO: Robert Crandall, William Lehr and Robert Litan. “The Effects of Broadband Deployment on Output and Employment: A Cross-sectional Analysis of U.S. Data,” Brookings Institute. June 2007.


Tim Karr NYC Council Testimony - Nov 2009


grip for far too long.15 But for all their talk about “deregulation,” the cable and telephone giants work aggressively to force through regulations that: protect their market monopolies and duopolies, stifle new entrants and competitive technologies in the marketplace, and increase their control over the content that travels over the Web It's now up to the FCC to pro-actively reinstate Net Neutrality. Without this antidiscrimination rule, phone and cable companies will have both the incentive and ability to shut the doors on our 40-year experiment with open media. We need to protect the open Internet as the essential infrastructure of our time. It is the social tool with which we will build a more prosperous, open and just nation. Free Press is encouraged by the Council of the City of New York efforts to adopt Resolution No. 712-A. It will have far reaching implications.


The Center for Public Integrity, "Well Connected." http://www.publicintegrity.org/telecom/default.aspx?act=archives

Tim Karr NYC Council Testimony - Nov 2009