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Wednesday News – Net (Non)Neutrality Edition

Good Morning Conflucians!!

Big news this week is the FCC ruling on net neutrality or in this case, the lack of net neutrality. Yet another case of Obama handing over what is the people’s to the few rich and powerful. But before we get to that, another cowardly Obama move deserves notice. Namely how the administration is preparing for their own indefinite dentition order for “terrorists”:

The Obama administration is preparing an executive order that would formalize indefinite detention without trial for some detainees at the U.S. military prison at Guantanamo Bay, Cuba, but allow those detainees and their lawyers to challenge the basis for continued incarceration, U.S. officials said.

The administration has long signaled that the use of prolonged detention, preferably at a facility in the United States, was one element of its plan to close Guantanamo. An interagency task force found that 48 of the 174 detainees remaining at the facility would have to be held in what the administration calls prolonged detention.

“We have a plan to close Guantanamo, and this detainee review process is one element,” said an administration official who discussed the order on the condition of anonymity because it has yet to reach the president.

So nice of them to add that bit about they can still “challenge” their continued incarceration. That doesn’t mean those don’t get put into the “circular file” of course. Another bit of information from the same article relates to what was in the defense authorization bill:

Provisions in the defense authorization bill, which has passed the House and is before the Senate, would effectively ban the transfer of any detainee to the United States for any purpose. That rules out civilian trials for all Guantanamo detainees, including Khalid Sheik Mohammed, the self-proclaimed mastermind of the Sept. 11, 2001, attacks. His potential prosecution had remained possible even though the administration had balked in the face of political opposition to a trial in New York.

The defense bill, if it passes the Senate, would effectively force the administration to conduct only military commissions and at Guantanamo Bay, which would also have to remain open to house those held indefinitely. The bill would also create new requirements before the administration could repatriate or resettle detainees who were cleared for release by the interagency task force.

So much kabuki theater. Notice that this is still a large majority Democratic congress doing this. And notice Guantanamo never closed. But I’m sure the president will be really disappointed in all this. As it turned out the bill didn’t pass (see below on the stop gap bill for even worse news).

OK, so back to possibly loosing the ability to watch Netflix online. What everyone not on the side of the big telco’s and cable companies wanted was a pretty simple net neutrality ruling that basically said you can’t discriminate network traffic based on its starting point or its end point. Clean, simple, and to the point. But that’s not what we got. What we got instead was a watered down “we really don’t think you should do that”, mostly. And some big loopholes you could drive a truck through. And on top of that, big exceptions. Really big exceptions. Basically the future of all internet, wireless, has no limitations whatsoever. So telco’s running wireless services are now free to charge different rates depending on where traffic is coming from or where it’s going. That is what Obama did today.

Let’s see some of the coverage. First from ars technica:

The Federal Communications Commission is releasing the details of its new net neutrality Order in stages. Although the FCC’s new ban on “unreasonable discrimination” for wired ISPs allows certain kinds of traffic discrimination (not all bits need be equal), the agency made clear after today’s meeting that “paid prioritization” deals with Internet companies are unlikely to be allowed. Critics had worried that the new Order would only affect outright website blocking, leaving paid prioritization untouched (or even implicitly sanctioned).

“Pay for Priority Unlikely to Satisfy ‘No Unreasonable Discrimination’ Rule,” advises one subheading of the new net neutrality rules. Ed Whitacre’s dream of directly charging Google and Yahoo to “use his pipes”—a key event in starting the entire net neutrality debate—appears to be dashed.


As we’ve reported, the FCC’s new rules forbid Internet providers from blocking lawful content and they require transparency from ISPs. They also require that network management and packet discrimination to be “reasonable,” but that only applies to wireline broadband. Wireless operators gets a free pass on rationality; they’re limited only to the transparency and blocking provisions.


“Specialized services” like IPTV (think AT&T”s U-Verse) will also be allowed over the last-mile broadband connection, although the FCC insists it will watch their deployment for anti-competitive behavior. But the Order rather strongly suggests that priority deals are “unlikely” to fit into this “reasonable” framework.

Let’s look at some of that closer. First there is some attempt to say it’s bad in normal, reasonable situations to have priority deals for either end of the internet connection. That is, it would be bad in normal situations to charge a starting point like a department store or netflix or a blogger different rates for different bit rate or quality of service priorities. And similarly in normal, reasonable situations it would be bad to charge end users or even low level ISPs different rates for different levels of priority traffic. OK. So what does normal and reasonable mean?

Well, it turns out they say some things aren’t normal and reasonable, and that includes things like video. So Netflix or Youtube or similar starting points can be charged more than others. And you as a user can be charged more to receive those. Don’t confuse that with prioritizing based on the type of data or “packet” which could reasonably say video is a bit lower priority (because it’s so big). Those types of rules are reasonable and effect data of certain shapes regardless of what video, who’s sending it, and who’s receiving it. In this case they don’t say that, they say that’s a special case and you can let, say, Comcast charge Netflix more to send data or you more more to receive Netflix data.

And look what else they say, they say wireless, e.g., cell, is exempt for the most part. They do say they should play nice, and they’ll be watching. You know, kind of like how the administration watched BP in the gulf. And remember, when you hear that about cell, keep in mind that’s very possibly the future of the internet as we move to 4G and then 5G cell systems; those will be faster than the alternatives. And by this ruling, those will already have unfair practices well in place. And you know how hard that is to get mega corporations to give up something. Kind of like how hard it will be to get any administration and congress to give up sucking 100M a year from social security and medicare after Obama pushed through that tax bill. So through your cell service, be prepared to pay different rates based on who you are and what you receive.

Two days ago, over on huff and puff, Al Franken had a column about the issue. Here’s a snippet from that:

This Tuesday is an important day in the fight to save the Internet.

As a source of innovation, an engine of our economy, and a forum for our political discourse, the Internet can only work if it’s a truly level playing field. Small businesses should have the same ability to reach customers as powerful corporations. A blogger should have the same ability to find an audience as a media conglomerate.

This principle is called “net neutrality” — and it’s under attack. Internet service giants like Comcast and Verizon want to offer premium and privileged access to the Internet for corporations who can afford to pay for it.

The good news is that the Federal Communications Commission has the power to issue regulations that protect net neutrality. The bad news is that draft regulations written by FCC Chairman Julius Genachowski don’t do that at all. They’re worse than nothing.

And sadly, we learned they did worse than nothing indeed. Here’s a follow up article at huff and puff on what eventually passed (emphasis mine):

Late Monday, a majority of the FCC’s commissioners indicated that they’re going to vote with Chairman Julius Genachowski for a toothless Net Neutrality rule.

According to all reports, the rule, which will be voted on during tomorrow’s FCC meeting, falls drastically short of earlier pledges by President Obama and the FCC Chairman to protect the free and open Internet.

The rule is so riddled with loopholes that it’s become clear that this FCC chairman crafted it with the sole purpose of winning the endorsement of AT&T and cable lobbyists, and not defending the interests of the tens of millions of Internet users.

For the first time in history of telecommunications law the FCC has given its stamp of approval to online discrimination.

Instead of a rule to protect Internet users’ freedom to choose, the Commission has opened the door for broadband payola – letting phone and cable companies charge steep tolls to favor the content and services of a select group of corporate partners, relegating everyone else to the cyber-equivalent of a winding dirt road.


Internet users deserve far better, and we thought we were going to get it from a president who promised to “take a backseat to no one in my commitment to Net Neutrality.” Watch now as he and his FCC chairman try to spin tomorrow’s betrayal as another “mission accomplished.”

Don’t believe it. This bogus victory has become all too familiar to those watching the Obama administration and its appointees squander opportunities for real change. The reality is that reform is just a rhetorical front for industry compromises that reward the biggest players and K-Street lobbyists while giving the public nothing.

Say it with me everyone: we told you so. He’s a stooge for the mega pro monopoly corporations. What else do you have to see to finally not say he failed, because he did exactly what he wanted to do, and finally not say, well he’s intelligent and he means well, because he does exactly what he means. What more needs to happen people. Well, at least they’re noticing he’s not on their side. Mostly. Got hope?

And speaking of faux messiahs like Obama or Assange on the left or similar ones on the right, why is it that some percentage of people on both sides of the political spectrum will follow someone like that? Here’s a nice quote from a early socialist and labor leader, Eugene Debs:

I don’t want you to follow me or anyone else. I would not lead you into the promised land if I could, because if I could lead you in, somebody else would lead you out.

I wish people could keep that in mind when they mostly blindly follow a leader.

Let’s see what else is in the news. Oh yes, after a year or so of skyrocketing health insurance premium costs (mine when up nearly 100%, and that’s with no doctor visits as an excuse even), the Obama administration is looking into it. It looks like they’ll be writing some really stern letters again (emphasis mine):

Moving to restrain skyrocketing health insurance premiums, the Obama administration is proposing rules requiring insurers to justify increases of more than 10% a year in 2011.

At the same time, administration officials plan to step up federal review of premiums if state regulators cannot adequately protect consumers, a move cheered by many leading consumer advocates.

The increased oversight comes as consumers nationwide struggle with rate hikes that have exceeded 30% in some places, even as insurance industry profits have swelled.

In the lead-up to passage of the new law, the soaring rates fueled calls to give state and federal regulators more power to scrutinize premiums and even deny increases that appear unjustified. Only some states currently have such authority.

The draft regulations unveiled Tuesday would not give state or federal officials the ability to deny rate hikes. Instead, the administration is relying on state regulators to scrutinize proposed hikes and to assess if they are justified by increases in the cost of care or other factors.

Yep, mission accomplished again.

Oh yea, the large majority of Democrats in congress couldn’t get together on a spending bill, so they punted for a stop gap until March when the Repubs, sill a minority in the senate, will of course be in complete control and will demand massive cuts:

Congress passed a stopgap funding bill last night to keep the government open into March, when Republicans will have greater power to cut federal spending.

On a 193-to-165 vote, the House backed a stripped-down measure that would freeze pay for federal employees, provide $160 billion for the wars in Iraq and Afghanistan, and head off cuts in Pell grants for college tuition. The Senate approved the bill hours earlier, 79-16.


The measure is needed because the Democratic-controlled Congress — in an unprecedented breakdown of the budget process — has failed to pass a single one of the 12 annual spending bills that fund the day-to-day operations of every federal agency.

It’s a feature not a bug as a certain klown likes to say. Let’s start placing bets on what will be cut next year.

The other big news of late was the results of the census showing some shifts in congressional seats. Two states lost two seats each, New York and Ohio. And a number of states, mostly in the northeast lost one seat each. And a number of states in the south and west gained seats. Here’s some general coverage at Bloomberg, local coverages at the NYTimes and the Miami Herald for some sampling of results.

That’s a bit of what’s happening. Chime in with what you’re seeing.

41 Responses

  1. Mu Morning Sneeze fits right into the topic with a cartoon explaining fake net neutrality

  2. Happy Solstice, DT. Thanks for the round-up.

    “For the first time in history of telecommunications law the FCC has given its stamp of approval to online discrimination.”

    I’m only surprised by my holding out any hope that net neutrality would be the law of the land. 😦

  3. DT, thanks for the great explanation of the latest Obama cave in…those fake net-neutrality rules that were passed. The spin they are putting on this is ridiculous.


    A Crowning Moment of Awesome in Bob Seger’s career (IMHO) was his cover of this Christmas classic.

    • Is it just me or is The Little Drummer Boy incredibly monotonous, no matter who sings it?
      Here, try this one:

      • It’s a choir thing – if you spent much time in choir there’s a bunch of Christmas songs that just bore the life out of you. Seems like you’ve mentioned choir before…

        • Oddly enough, we never sang The Little Drummer Boy. We sang Sleigh Ride, Ukranian Bell Carol, On Christmas Morning and lots of stuff in latin. I think my choir director was an elitist.

          • funny! All choir directors are elitist, IMO.

            You know there is always the past life (being a kid in the 70’s) with three tv chanels and LIVING for the same handful of Christmas specials every year – one of them being “The Little Drummer Boy” with the fuzzy looking clay-like animation.

      • It’s not just you, It is monotonous and cheesy.
        It’ s always made me cringe.

  5. Today’s tabloids are all about the Census results – Ds lose, R gain about 6 seats

  6. What is amazing to me is that it is the Repubs and Fox News who are howling in protest of the faux net neutrality. Apparently a big part of that howl is not about the money but about concerns that the new regulations open the door to FCC regs on content—the target being to shut down the megaphones of the conservatives on radio, tv and internet services.

    • @RBReich: FCC: Stop tinkering with Internet and return to the “fairness doctrine” requiring broadcasters to provide equal time. Put Fox out of biz.

  7. Re: the census. I found two things rather interesting about this census. 1 is that the movement behind the population shift is people moving to more rural areas. I am pretty sure that a big part of that is that it is just plain cheaper to live in a more rural area than to live in a more densely populated place. My own experience is a huge case in point; my 2 br in CA costs me $6000 a year in property taxes; same size 2 br in MO is $179 for the year. There is about the same differential in utility costs. If it weren’t for the climate differential, it would be a no-brainer and even that is becoming a less and less of an issue. The same is true of Tx where the climate and the COLA are just flat out cheaper—that is if you can tolerate the bible belt with the sun belt.

    • Also shows movement to states with lower state taxes or no state taxes. Movement away from high state tax eastern states or west coast taxes. (Execption is Washington–not sure why).

      Not to mention that many businesses are moving to the same low-tax states (Texas , especially), so that’s where the jobs are, compared to other states.

      Definitely, the economy.

    • Same here in NJ. My modest little townhouse is ~$6500/year in property taxes and there is no property to speak of. I guess I can modify the plants next to the driveway if I wanted to.
      It kind of makes me wonder why the masters of the universe who run pharma companies, who are always complaining about how expensive it is to employ the people who actually, you know, do the discovery, have us clustered on the Northeast Corridor where you have to make $100K to just barely be middle class. They could save a huge amount of money if they just moved us to Detroit or Kalamazoo. And they wouldn’t have to give up the precious presence they say they need in those high profile places. All they need is a satellite lab of a couple dozen project evaluators. That and an internet connection should do the trick. Voile! Full employment for the lab rats at reasonable cost. And where the educated are, the arts will follow. It’s a win-win for everyone.
      But NOooooOooooo. The Wharton guys just have to have their trophy Cambridge labs like they have to have their latest BMWs.

    • It think companies are moving jobs and facilities to “right to work” states with better deals on taxes for large businesses.

      No unions AND the states are PAYING the business to relocate through tax breaks and infrastructure improvements. I think this is behind the population changes.

      I’m not sure why there is a migration to WA. Our unemployment is about average or a little above.

      • Fair enough. But in this economy, families move to where the jobs are, regardless of why that’s where the jobs are.

        Did you see the 60 Minutes discussion of the next bailout: state budgets that are completely out of control (most in high tax states) and literally bankrupt. Mentioned CA, NY, NJ, and Illinois. Even called Illinois a “deadbeat ” state–can’t even pay vendors.

        Also discussed the municipalities that will face bankruptcy in those states because help from the state is impossible.

        THAT’s the new financial crisis, which 60 Minutes implied will happen in 2011 (Obama money runs out). And that’s CBS reporting—not even Fox.

        If Obama pushes for municipal/state bailouts—selectively, of course—there will be hell to pay in 2012.

        Just sayin.

    • In Texas, there are have very high property taxes in the cities and extremely high insurance rates along towns even somewhat away from the coast. The utility costs are very high in Summer, as is to be expected with 100 degree F temps with 90+% humidity, but much lower in what passes for Winter.

      Taxes are much cheaper in the ex-subs, but then you may have a commute on your hands.


  8. 2nd thing on the population issue: definite drop in births and immigration behind the slow growth. That is the economy talking I think.

  9. So Net Neutrality is like Clear Skies?

    • Yup.

      What he says it says, and what it actually says, are 2 different things.

      Just like Healthcare “reform.”

    • It’ll be interesting to see how the Level 3 situation works out. They’re the people who serve Netflix movies from the cloud. Netflix and Comcast are fighting about who pays for incremental costs as more people stream movies. Either way, cost will pass on to consumers…higher Comcast fees or Netflix fees.

  10. You know, DT, this news was all BAAAD. Aren’t there any rainbows and magic ponies in your world?

    Nice quote from Debs. Very dao.

    • Yea, I noticed the news was kind of a downer today. But definitely there are lots of rainbows and magic ponies in my world. But they wouldn’t be as interesting to the general public as they are to me.

    • I heard that the health care for 911 rescue workers is going to come up for a vote. If it passes, there’s a rainbow for you after all the rain.


  11. So what dimension will the O-bots assign to the latest Obama chess move?

    I’m really slow connecting the dots but it occurred to me that employer provided health care and weak labor law are two reasons you don’t see the general strikes like they have i the E U.

    That and a media subservient to Wall Street and corporate entities keep the populace in a stupor.

  12. Just watched “breaking news bama” give his phoney speech on DADT. His stories are always the same, and never come across as the truth. That ridiculous practice of one pen/one letter signing really needs to go away.

  13. Elephant evolution. African elephants are really two different species and the DNA of a mastodon has been sequenced.
    Take that, creationists.

  14. Harry and Louise (not there real names) were not Obots but thought he would bring the “Change”
    Now Louise asks rhetorically “You think Hillary would have been any better?”. 

    My resppnse:

    Hey I’m WAY too into this stuff I’ll admit. But if you won’t mind indulging your crazy neighbor/friend just one more time I PROMISE I’ll shut up. 

    Would Hillary have reined in Wall Street? You betcha!
    “In a Wall Street Journal opinion piece, Senator Hillary Clinton has advocated addressing the rate of mortgage defaults and foreclosures that ignited this crisis, not just bailing out Wall Street firms: “If we do not take action to address the crisis facing borrowers, we’ll never solve the crisis facing lenders.” She has proposed a new Home Owners’ Loan Corporation (HOLC), similar to that used after the Depression, which was launched in 1933. The new HOLC would administer a national program to help homeowners refinance their mortgages. She is also calling for a moratorium on foreclosures and freezing of rate hikes in adjustable rate mortgages.[96]” (http://en.wikipedia.org/wiki/Emergency_Economic_Stabilization_Act_of_2008)
    Excerpts from Hillary’s WSJ piece dated 25 September 2008 (http://online.wsj.com/article/SB122230767702474045.html):
    Even the likes of Clinton hating journalist Dana (Mad Bitch Beer*) Milbank voices the unthinkable:

    Dana Milbank – Would we be better off under a President Hillary Clinton?

    Would unemployment have been lower under a President Hillary? Would the Democrats have lost fewer seats on Tuesday? It’s impossible to know. But what can be said with confidence is that Clinton’s toolkit is a better match for the current set of national woes than they were for 2008, when her support for the Iraq war dominated the campaign.

    Back then, Clinton’s populist appeal to low-income white voters, union members and workers of the Rust Belt was not enough to overcome Obama’s energized youth vote. But Clinton’s working-class whites were the very ones who switched to the Republicans on Tuesday.

    Back in ’08, Clinton’s scars from HillaryCare were seen as a liability, proof that she was a product of the old ways of Washington. But now that Obama has himself succumbed to the partisanship, his talk of a “growth process” in office makes Clinton’s experience in the trenches look like more of an asset.

    Clinton campaign advisers I spoke with say she almost certainly would have pulled the plug on comprehensive health-care reform rather than allow it to monopolize the agenda for 15 months. She would have settled for a few popular items such as children’s coverage and a ban on exclusions for pre-existing conditions. That would have left millions uninsured, but it also would have left Democrats in a stronger political position and given them more strength to focus on job creation and other matters, such as immigration and energy.

    The Clinton campaign advisers acknowledge that she probably would have done the auto bailout and other things that got Obama labeled as a socialist. The difference is that she would have coupled that help for big business with more popular benefits for ordinary Americans.

    Clinton, for example, first called for a 90-day foreclosure moratorium in December 2007, as part of a package to fight the early stages of the mortgage crisis with a five-year freeze on subprime rates and $30 billion to avoid foreclosures. But an Obama campaign adviser dismissed Clinton’s moratorium, saying it would “reward people for bad behavior.”

    Calls for a moratorium returned a few weeks ago with news of lenders’ foreclosure abuses. Polls indicate public support for a moratorium, but Obama ruled it out. It’s a safe bet Clinton would have done otherwise.

    Some differences would have been stylistic. As a senator from New York, Clinton had good relations with Wall Street. As the heir to her husband’s donor base, she would have had more executives in government – envoys who would have been able to ease the uncertainty about tax and regulatory policy that has been crippling business.

    Most important, there can be little doubt that, whatever policies emerged, she would have maintained a laser focus on the economy; after all, she did that during the 2008 campaign, when it wasn’t as central an issue. She got little credit, for example, when she gave a speech in Iowa in November 2007 warning about the dangers of new financial instruments. Now, it seems prescient; then, it sounded boring.


    Gary Younge reminds us of another great Orwell essay, In Front of Your Nose:

    The point is that we are all capable of believing things which we know to be untrue, and then, when we are finally proved wrong, impudently twisting the facts so as to show that we were right. Intellectually, it is possible to carry on this process for an indefinite time: the only check on it is that sooner or later a false belief bumps up against solid reality, usually on a battlefield.
    Hillary Clinton speaks at the Council on Foreign Relations September 8, 2010 in Washington, DC. (Mark Wilson / Getty Images)The secretary of State delivered the best speech of the Obama administration this morning. Tunku Varadarajan on her “new American moment”—and why she’s better than her boss.

    What is so piquant here is not the fact that Hillary understands that Obama is president. It is the growing sense that Hillary would have made a much, much better president than Obama.

    * Media Matters for America

  15. If anyone doubted whose side Obama is on.

    Jarret even made a pretty startling admission, one attendee told me. Asked why Obama said he wants to raise taxes on upper-income people for no other reason than to level the playing field, “She basically told me he said what he said during the heat of the campaign, and that’s not his true belief.”


    Levin and others were said to have come away from the meeting pleasantly surprised by Goolsbee’s and Jarrett’s eagerness to be “constructive” and listen to different points of view, especially when they seemed to concede the president’s $800 billion stimulus package didn’t really work and that the Democrats who claim that the Social Security system is in “surplus” are using fuzzy math.

    Obama apparently does believe in tax cuts for millionaires, thinks the original government stimulus did not work, and believes Social Security does not have a surplus implying that benefits are in play. He clearly swims with the investor class.

    • The original government stimulus did not work well as it had a large tax cut component and was not properly focused (except for support to the states). So I guess he would be 1 for 3 — if he understood why if did not work. But he probably thinks it needed more tax cuts for the rich.


      • “Support for the states” ended up in their using the block grants to fill in their own budget holes, without looking at the underlying problems that got them there.

        That state stimulus ends in 2011, with no more coming, so look for those layoffs/bankruptcies happening next year.

        Obama just postponed the problems. He didn’t fix them.

        • And the Fed’s not going to bail out the states I don’t think. The muni bond spreads are going to get bigger. Revenue will take time to come back. Will be tough once the stimulus runs out in the spring.

  16. As Nancy passes the gavel, she’s enlisting Steven Spielberg’s help for an image makeover.

    Now, in public, Pelosi is projecting a no-looking-back aura. And behind closed doors, she is laboring to refashion the image of House Democrats – as well as herself. Lawmakers say she is consulting marketing experts about building a stronger brand. The most prominent of her new whisperers is Steven Spielberg, the Hollywood director whose films have been works of branding genius. Lawmakers said Spielberg has not reported toPelosi with a recommendation.

    • Too late. Not even Spielberg can help her now.

      Didja know that special tax credits for movie industry producers were added to the tax cut bill as a “sweetener?”


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