The cable company ate my Internet.
Sounds like some wacky excuse a youngster might give his teacher for failing to turn in online homework. Soon it may not sound so far-fetched.
There is a “perfect storm” brewing of mergers, deals and rulings that threatens to change media consumption and communication in previously unimagined ways. As proposed, the changes likely would make it harder for people to do all the things they’ve come to rely daily on the Internet for, from shopping and registering a car to starting a business.
Some analysts and consumer advocates feel the Internet is on the verge of going from a sort of town commons, open to everyone, to the equivalent of a high-rise penthouse – prime real estate for those who can pay.
One change is the pending $45 billion merger of Comcast and Time Warner, which would create a company in control of about 40 percent of all wired, broadband Internet subscriptions in the country. Just as crucial is the proposal of new and weaker Federal Communications Commission rules, which critics say would allow Internet providers to create a “fast lane” for companies and consumers who can afford it and a “slow lane” for everyone else. Both changes could be in place by the end of the year.
Since its creation, the Internet has operated, at least in the minds of many consumers, like a phone line but with an incredible amount of information and functions available. You pay one price every month, and you get to do virtually everything the Internet offers.
Comcast, which stands to be the biggest Internet player if its Time Warner acquisition is approved, says it generally supports the concept of an open Internet but thinks any government regulation could stifle innovation.
The big question is what do we – consumers, businesses and the economy as a whole – stand to lose if these changes play out?
“I couldn’t do my job without the Internet,” said Erin Bishop, 46, of Falmouth, who works from home as director of the nonprofit group Maine Archives and Museums. “You only really have one or two options now for Internet service. The idea that we might have to keep buying the higher-level packages or risk getting slower service is concerning to me. That’s how cable (TV) has become, and I can’t see (the Internet) being run any differently.”
WHAT’S AT STAKE
Cable TV companies have been getting larger and gaining more control over their industry every year. Television has gone from a basically free commodity in the 1950s and 1960s to a service tightly controlled by cable companies charging many people thousands of dollars a year. The Comcast-Time Warner deal likely won’t drastically change the cable TV picture. What it will do is create a company that is so large it may not need to innovate much or control prices to keep customers, analysts say.
Neither Comcast nor Time Warner is known for making customers happy. In May, the American Customer Satisfaction Index, a poll of 70,000 people, ranked the two companies dead last in customer service among 230 companies across 43 industries.
What is different about the changes pending this year is the potential impact on the Internet. The Internet plays a crucial role in daily life and big-picture issues such as economic growth, social justice and personal freedom. For $20 to $60 a month, people work from home, file taxes, watch movies and TV shows, communicate with people around the world, fill out job applications and health care forms, and much more.
Consider the things we might lose if the Internet were to become unaffordable or inaccessible:
• Alternatives to cable: Lots of people have gotten rid of cable TV to save money and now use their Internet connection to stream shows and films. But if Internet connections become too slow for video, or Comcast and others start charging for how much data someone uses, will streaming video still be a viable cable alternative?
• A lifeline for low-income people: Low-cost Internet connections, or free ones at a library, are crucial to poor people for such basics as applying for a job or health insurance.
• Business growth: It’s hard to find a business, especially a small business, that doesn’t rely heavily on affordable and reliable Internet access.
• Quality of life: People who work from home might not be able to do so if the Internet becomes too costly or too cumbersome. Plus, from homework to registering a car, there isn’t a household chore that hasn’t been made more efficient because of the Internet.
• Innovation: If the Internet becomes harder to access or slower, will individual innovators be stifled? Will the next big idea have to wait until someone with the highest-tier Internet service thinks of it?
“The Internet is the dominant communications medium of our time, so there needs to be a guarantee that it’s free and open to everyone, as it has been,” said Josh Levy, campaign director at Free Press in Washington, D.C., a media watchdog group. “You look at every form of mass communication, radio, TV, and they started out being pretty wide open until they became commercialized and a few companies took control of really shaping them and how people could use them. With the Internet, it’s really important that a blogger in his living room gets treated the same as Fox News or MSNBC.”
IS ALL REGULATION BAD?
Consumer advocates say the Internet is more like a public utility than simply a form of media delivery, and should be regulated as such. Many argue Internet providers should at least be classified as “common carriers,” like phone companies, meaning that no content – or no call – can be favored over another.
Another reason for regulation, some say, is that fixed-line Internet networks are expensive to build. Companies generally don’t like to build networks where a competitor already has one. That’s led to virtual monopolies in many areas by Internet providers that have little incentive to keep prices low or work to increase people’s access.
In most of Greater Portland, there is only one choice for a fixed-line broadband Internet service, also known as “cable modem high speed Internet,” and that’s Time Warner. Other options include a DSL Internet connection, using phone line technology and typically at slower speeds, from FairPoint Communications or a couple of smaller providers.
Time Warner is Maine’s largest Internet provider, with a geographic monopoly in most population centers. Comcast has a small area of Maine customers, mostly in towns around Brunswick and Kittery. But if the merger takes place, Comcast will control most wired broadband Internet subscriptions in Maine. Neither company will say how many customers it has in the state. But Time Warner has said it has more than 300,000 in Maine and New Hampshire and a Comcast representative said that company has 1.6 million customers in an area that spreads from Greater Boston into Maine and New Hampshire.
“Right now, with the merger and the FCC rules, this is the biggest invitation the (government) has had to get it right, and to reclassify the Internet as a common carrier and to promote more competition,” said Wayne Jortner, senior counsel in the state’s Office of the Public Advocate, which represents the public in utility and telecommunication issues. “By approving every merger that has come along, the FCC has been restricting the possibility of other companies to build networks and compete. We have fallen way behind much of the world in that regard.”
Studies have shown that the United States ranks about 15th in the world in terms of households that subscribe to a broadband Internet service, and that it ranks seventh in terms of the most fiber-optic Internet connections, considered the fastest, according to information distributed by Jortner’s office.
The country’s rank in terms of broadband subscriptions can be explained at least partly by geography. It’s big, so connecting people requires massive infrastructure.
But the rank is troubling for a country acknowledged as the birthplace of the Internet, consumer advocates say.
“With the technology available, this should be a golden age for innovators in this country and for people wanting to use the Internet to serve democracy,” said Michael Copps, who was an FCC commissioner from 2001 to 2011 and now works with Common Cause in its effort to promote an open Internet. “Instead of leading the world, we’re lagging behind. We may no longer be able to be the country where small innovators in their garage are producing the next big thing.”
The importance of the Internet to Maine’s economy is unquestioned. Many Maine small businesses were started by people who moved here because the Internet allowed them to live anywhere. In other small traditional businesses, farmers, craftspeople or food producers depend on the Internet to sell products outside of Maine.
The state has about 130,000 so-called “micro businesses,” operations that employ five or fewer people, said Doug Ray, spokesman for the Maine Department of Economic and Community Development.
“For many of these businesses, the Internet provides an opportunity to better compete in a global market,” he said. “Access, speed and reliability are critical to the ongoing success of Maine’s economy, both in terms of job creation and our ability to attract new private investment.”
TECH ISSUES HARD TO GRASP
While consumer groups, many small businesses and some politicians are wary of an expanded Comcast having too much control, the company itself and some industry analysts say the slow lane/fast lane concept is a fallacy. Sena Fitzmaurice, a Comcast spokeswoman based in Washington, D.C., said the actual control of content on the Internet doesn’t fall totally in the hands of an Internet service provider. She said Internet content can be subject to “traffic jams” at many points along the Internet infrastructure, points controlled by other companies that help provide content to consumers through Comcast or FairPoint.
“I don’t disagree that’s the layman’s understanding of it, but it’s not technically correct,” Fitzmaurice said. “We only control the last mile, the content on our network. We can’t discriminate against content on our network; we can only control what gets on our network. We don’t control how the traffic gets to us.” Yet Comcast and Netflix agreed to a deal in February, for an undisclosed amount, where Comcast provides Netflix better, fast access to Comcast customers.
So doesn’t that mean Comcast is controlling access? And if some companies get faster access to Comcast customers, will others get slowed down? Fitzmaurice says no. She says that, in the past, Netflix had to pay an Internet transit provider, Cogent, to get its content on to Comcast. Now it pays Comcast directly.
Many argue that granting “fast lanes” to Netflix and other companies who can afford them will eventually lead to “slow lanes” for people using services that don’t make money, like continuing education websites.
“The argument that somebody should be able to watch a Netflix movie in flawless high-definition, at the potential expense of someone making a colossal life decision, just rubs me the wrong way,” said Hannah Holmes of South Portland, proprietor of Hannah Holmes Realty. Since she often works from home, or remotely, Holmes relies on the Internet for her livelihood. But she also worries about others in the community who could suffer from restricted access.
John Bergmayer, senior staff attorney at the public advocacy group Public Knowledge, thinks the “slow lane” is inevitable without regulation. He and others point out that some Internet providers own content companies and may favor them if FCC rules allow. Comcast, for example, owns NBC and could choose to make the network’s video more readily available on the Internet and at faster speeds.
The precedent set by the Netflix-Comcast deal “could block the engine of economic growth,” Bergmayer said. “If you’re starting an Internet business, maybe you’d think twice if you thought you’d have to fork over a huge amount to a large ISP,” or Internet service provider.
Fitzmaurice and other representatives of Internet providers argue that classifying the Internet as a regulated “common carrier” could stifle expansion and innovation.
“We’ve increased our speeds 13 times in 12 years, but as a common carrier we would have needed permission every time,” Fitzmaurice said. “That would have taken six months to a year, each time.”
CHANGES COMING FAST AND HEAVY
The Comcast-Time Warner deal was announced in February. The Department of Justice and the Federal Communications Commission could decide before the end of the year whether it should go forward. Meanwhile, the commission began considering new rules dictating Internet access.
A federal appeals court in January struck down previous “open Internet” rules, which prohibited Internet providers from blocking or prioritizing traffic, after a legal challenge by Verizon. The court determined that the rules violated previous FCC rulings that had classified the Internet as an information service, not a “common carrier” like a phone service, and therefore outside of regulatory reach.
Chellie Pingree, a Democratic U.S. representative from Maine, was an early opponent of the Comcast-Time Warner merger and of relaxing federal Internet rules. In the weeks after the merger was announced, she started an online petition asking Attorney General Eric Holder to block it. By July 8 that petition, on the social action site CREDO, had more than 161,910 signatures. Pingree followed with a letter to Holder and the FCC, outlining her reasons for wanting the merger blocked.
“The anti-competitive effect of such a large player in the market for both cable television and the future of a free and open Internet seems obvious,” she wrote.
Pingree said she feels that once people find out how drastically the Internet they’ve come to know might change, they will be angry enough to protest to elected officials and the FCC.
“At some point people will be furious enough to lobby Congress, and pressure from the public on consumer issues can sometimes turn things around,” she said. “I think an open Internet should be a fundamental right.”
Pingree is married to S. Donald Sussman, majority share owner of MaineToday Media, which publishes the Portland Press Herald and Maine Sunday Telegram.
Consumer advocates say it’s hard to mobilize public opinion on the proposed changes regarding the Internet, since the technical issues involved are difficult to understand, and people have gotten used to a climate of corporate mergers in all fields of communication and feel powerless to do much about it.
Plus, the term “regulation” carries a lot of baggage and is a hard concept to sell, even to people who think the Internet should be open.
“When two big companies merge it’s never a good thing. But I’m not sure I’d like to see (the Internet) regulated too much, either,” said Russ Lunt, 56, a retired South Portland public works employee who said he uses the Internet mostly socially, for Facebook, to participate in various clubs, and to research hobbies. “When you put limits on things, it restricts what can be done.”
IMPACTS WOULD BE EVERYWHERE
There are groups of people in Maine who see daily the risk of making the Internet pricier, slower or more in control of corporate interests.
Maine’s librarians are fearful of more corporate control over the Internet. People without Internet access at their homes regularly use the connection at their local library.
“Libraries see people using their Internet for a variety of vital reasons every day, so if large, rich companies can pay to have their information moved faster, where does that leave the person from Houlton, Maine, who goes to the library to apply for a job?” said Maine State Librarian Linda Lord. “That is a dreadful fear of mine. What if, all of a sudden, most of us can only get the third tier of service when we need the first tier?”
The Internet has become as crucial and as woven into our lives as electricity. And like electricity, you don’t have to be a fan of high-tech gadgets and toys to have need of it every waking hour.
Kathy DiPhillipo of South Portland describes herself as someone who doesn’t like to be “connected all the time.” Yet, in her home, the Internet is a lifeline.
DiPhilippo, 46, works as director of the South Portland Historical Society. She does much of her work on the Internet. So does her husband. Her three children, ages 12 to 16, use it for homework and school projects.
In a typical day, DiPhilippo said, her family will stream movies and TV shows nightly because they chose to save money by dumping cable TV, and she might check school websites or look up a recipe. She also volunteers for several groups, mainly because the Internet allows her to do the volunteer work from home quickly and efficiently.
Like a lot of people, DiPhilippo doesn’t keep up with the many different developments happening now with the Internet.
“I’m aware there’s a potential for change, but I don’t really keep up with (the news), and I feel like I can’t really control these big events,” said DiPhilippo. “All I really have control over is what I spend my money on.”