GM's New Chairman -- You Won't Drive on My Roads for Free

Who says there is no cosmic irony in the bland world of telecom? On the day after thousands and thousands of pages were filed with the Federal Communications Commission (FCC) on a new national broadband plan, General Motors announced its new post-bankruptcy chairman -- Ed Whitacre, the former chairman of AT&T.

It was Whitacre who set off the Great Net Neutrality Storm of 2005-2006, when he took control of the Internet on behalf of AT&T, putting forth the unique view of the world that Google, Yahoo and other Internet companies were using his company's telecommunications network "for free," and he wasn't going to allow that. The fact that those, and many other, companies were paying millions of dollars for telecommunications didn't seem to matter.

The issue was one of control -- Whitacre had it, and he wasn't going to give it up without a fight. Of course, with General Motors, Whitacre will be able to get back to his original model. Not only Google and Yahoo, but others are using his roads for free. Heaven help the gearheads who want to change out parts in their new post-apocalyptic GM models. Under the Whitacre model, they can forget that after-market new carburetor or the dual exhaust. Even new hubcaps, would be on the no-no list.

Whitacre could gin up a few new revenue streams as GM tries to recreate itself. Cars could be sold with speed caps, so customers would pay extra monthly fees for engines that allowed you to drive faster, but only for certain distances between particular destinations. (That might not be a bad thing, come to think of it.) Lauren Weinstein suggested car owners might face mileage caps, or would have to pay to start their cars. Those are his cars, and don't forget it.

Sad as it is to mention, the ghost of Whitacre prevails over the current proceeding, much as it hovered over the past. Of course, the language used now is more diplomatic than Whitacre used. Instead of accusing companies of being "nuts" if they think they can use "pipes for free," the industry has refined its approach. They still want control over users and how users employ networks. That kind of idea should sink, "like a rock," as it were.

Telephone Companies Want Internet Control

That's how the thousands of pages of comments break down. On one side are the network providers and their eco-system of suppliers, much like the auto companies and the companies dependent on them to make the parts. They roll out every rhetorical device/threat they can think of to stave off the fact that the companies owning the networks shouldn't play favorites. On the other side are just about everyone else -- the consumers and their advocates, who want the government to make certain that Internet policy benefits everyone.

AT&T, for example, wants to make sure that: "Among other things, the Plan should make clear that policymakers will not allow ancillary debates about 'net neutrality' and theoretical concerns about potential market developments to eclipse the importance of enabling investment in and use of robust network management capabilities to meet critical public-safety needs." For a company that in its comments urged the FCC to think outside the box, this comment certainly meets the test. Now, for the first time, having a neutral, non-discriminatory Internet will hamper public safety. Funny, for all those years that the network was neutral and non-discriminatory under the Communications Act, no one found a public-safety issue. Only in the last couple of years, it seems, has this become an issue.

Not only is a non-discriminatory Internet potentially harmful to public safety, it will also make service less affordable, AT&T argued. Just think this is a company intent on putting bandwidth caps on its customers, and yet finds the time to worry about affordability, even as it cuts down on deployment and forces public-access channels into the channel 99 oubliette. The message is simple, and constant: do it our way or we won't invest. (Speaking of which, iPhone fans, which company is it that's keeping the new phone from using some of its best new features? Not Apple. Oh, yes, AT&T.)

Verizon, too, takes the hard edge off of the Whitacre logic, through such terms as "consumer empowerment," and "consumer choice framework." Verizon is all for those concepts, when it provides the empowerment and the choices. Heaven forbid that the FCC requires wholesale or line-sharing access to Verizon's services. Those might be the regulatory burdens that would inhibit innovation or investment. Instead, one must give network operators the "flexibility" to offer "managed" services. Verizon Executive Vice President, Tom Tauke, trotted this horse out of the barn a couple of weeks ago, when he said, "Our view is, in the future, consumers ought to have the ability to choose between the wild, wild West of the Internet or to choose a different experience."

In its filing, Verizon made that argument: "Some customers may prefer more highly managed Internet access services that provide additional layers of security to shield themselves or their children from certain sites or from online security threats, while some tech-savvy users may prefer a less-managed service without those protections." That's a fine idea -- for 1998. If Verizon wants to get into the walled-garden business, I'm sure it could buy AOL, or purchase the rights to Prodigy's name. One of those companies is hanging by a thread; the other no longer exists, because access to the Internet at large killed them both. Consumers preferred the Wild, Wild West and the broad array of features and services.

Instead, consider the "managed" network to be the total control network, providing protections that the company doesn't provide now -- it depends on Yahoo!. Of course, Verizon could do that now, and it could manage its network to optimize traffic in a non-discriminatory way. But what fun would that be, when the company could guarantee a better quality of service for just a little more money every month? And perhaps some sites, like a video service, would rather be carried on that "managed" network than on the old, dirt-road Internet.

Verizon opposed "backward-looking regulation" like neutrality as killing investment. On the other hand, Tauke not four days before the comment was filed, said he was open to considering a non-discrimination (the so-called Fifth Principle) to be added to the existing FCC Internet Policy. As quoted in Broadcasting and Cable, " 'I'm not saying I am inviting a fifth principle," Verizon Executive VP Tom Tauke told reporters Thursday at a press briefing, 'but I wouldn't want to say that we couldn't find a way to live with a fifth principle.'"

All of those companies support widespread deployment of broadband, except of course when they sell off rural exchanges or won't spend money to provide the service. AT&T is all for ubiquitous broadband, yet it fought in the North Carolina legislature to prevent the town of Wilson from building its own network. Verizon is all for ubiquity, but is allowing Frontier the pleasure of serving these areas.

Consider these two sentences: 1) "Notwithstanding the widespread competition in most parts of the country, certain high cost, hard-to-serve areas currently remain completely unserved by any forms of Internet access other than dial-up or satellite. These are the areas where the business case for private investment is most difficult to make." 2) "The extension of [service] to territory not now served is, in general, impeded by the cost of such extension."

The first is from Verizon's filing of June 8, 2009. The second is from a Department of Commerce report of Jan. 23, 1934, talking about the Bell System extending telegraph service to rural areas.

There Is A Better Idea

On the other hand, Public Knowledge and others, Free Press, Consumer Federation of America/Consumers Union and many others advocated a different approach, a realistic approach that recognizes the essential nature of the Internet, the lack of choice for consumers and our falling standing in the world for the Internet and for innovation.

We want an open network that benefits everyone. The truly open network is an anathema to not only the telephone and cable companies, but also to those who want the network used for their own purposes -- such as futile mandatory filtering of copyrighted material.

We want to reverse course and turn back to the pre-2005 days, when thousands of Internet Service Providers flourished, when the Internet was developed, to make sure that the Internet remains free of discrimination and control (not management, control. There is a difference.)

Is it regulation? Yes. Has it proven to support and give opportunities to entrepreneurs and developers? You bet. That's the better idea.

Comments

[Joel Watson]

Verizon Executive Vice President, Tom Tauke, trotted this horse out of the barn a couple of weeks ago, when he said, "Our view is, in the future, consumers ought to have the ability to choose between the wild, wild West of the Internet or to choose a different experience­."

-- We have already had this "different experience". It is called AOL. I will take the wild, wild West any day over that heap of garbage.

[stargazer13]

why would one man want control of every thing on the net (greed pure and simple )

there is no free free is bad there is no profit in free

I am tired of greed and profit life is so much more then this!

I was thinking they all must be close in taxing us on the air we all breath !!

wow 300 million people breathing just look at the profit margins when will all this greed profit and control

end most say never and they would be right but I can still dream of a better world !!!

a world where we care more about people then profits

where there is no such thing as a CEO with a bottom line or agenda

when less then 1000 men control the lives of over 300 million people for profit

my heart goes out to my fellow man and says look here see what they want to control and profit from now

I am tired of being a cash cow we all are we the people do not want your greedy profit driven hands controling our world wide web so knock it off !!!

[GardenerNorCal]

This cow has just about run out of any cash. Where will their profits come from next? They are pushing gas back up to four dollars a gallon, cap and trade will up my utilities as high as they were under Enron, my job isn't secure...w­here's the money going to come from?

[Helzapoppin]

AT&T loves to tout it's network now as "national security infrastruc­ture." It's their version of the govt citing national security so they can be free to act like totalitarian despots. If that is the case, then the entirety of the country's telecommunications backbone - cable and landline at the very least - should not be in private hands. Decades of bickering over line access and stifling of true competition needs to end. Nationalize the lines and open them to all content providers.

[watchTVgetSTUPID]

How much is it worth to be able to control what people are told?
Ask Goebels.

[WellTickleMeWillie]

He's dead. Just go ask your local Rethug Congressman if you have one or down to the local Evagelical fundie church and ask the minister. Actually any right wing nut (FAUX noise) can provide this info on controlling what people are told since they have been doing it for a long long time.

[Conk]

Ok, so now the left is in control. When do we start seeing some truth?

[leevntheus]

CONT.

America, more than any other western European colonial entity, became a mighty capitalistic empire by starting with FREE land that it TOOK and FREE labor that it ENSLAVED. With these principals, America had a 400 year head start on the rest of the world's economies.

NOW - there are no more extensions of economic growth due to territorial or resource expansion. So... we create, out of thin air, new ways for rapacious corporations to screw every last cent out of the middle class. In other words, the only way for our DEBT BASED monetary/economic system to continue to work is to cannibalize our own population's wealth.

We have REACHED THAT POINT -the point where there is no more wealth for the middle class to give up. Hell, not only have we no more cash, but we have no more assets or ability to borrow to spur "economic growth".

As long as the UberCorps continue to run our government, we will all become new versions of 1890's working poor. Fathers and teens will work 12 hours a day seven days a week just to rent a shack and feed bread to the family, while ATT and Goldman Sachs CEO's will live it up in Dubai.

[leevntheus]

Between energy, communication, health care, and banking manipulations that Ultra Corps have had under way since Reagan, we are all doomed.

Non regulation of these entities allows them to become tyranical monsters that see the public as serfs to be controlled. America is not free because we have given up our democratic power to Big Business, which now has enough wealth, control, and clout to implement any agendas it wishes with lobbying and payola as well as revolving door politics.

Let's face it, America is NEVER going to be simply a land of free people. Its a land of queen bee CEO's and the worker bees that slave to death to keep these CEO's in the Hamptons.

All utilities should be PUD's. Telecom and banking need to be HIGHLY regulated. Health care has to be single payer public. If we took all of the portions of the GDP that private MegaCorps have sucked from our country for their own monopolies and invested that money back into education and small business, I believe our GDP would greatly outpace what we have now.

[GardenerNorCal]

I totally agree.

[iknowdou]

CONT.

Another reason I liked it was that it is a great news report about an important issue, and now I don't have to devote a whole day to researching and reading about the latest development in order to rationalize what facts to trust enough to piece together the story for myself. Thank you!!

When I hear the question, "what is wrong with todays newspapers?", I usually think, it's lacking that thing that I'll know when I see it. Your reporting illustrates this for me.

[iknowdou]

Mr Brodsky,

Wow. This is excellent reporting. I am blown away! Because it's rare to find great reporting in the US news arenas these days! I loved that this article provided a more legitimate alternative to the traditiona­l-'balance­d'-news-st­ory than the present-da­y-media-co­rporations would ever allow for. There are always more than two sides to every story, but we will never know that if we are only allowed to 'know' what the MSM wants us to 'know'. I also liked that you were able to translate the dense language that the debaters are using so that I can appreciate how scary the jumbled combination of words are, when used in this regulation vs anti-regulation argument 'debate'. And now I understand the subject enough to know WHY it's scary. Important!!

I think the best antidote to the traditional mode of government­/media/cor­porations is education. Thank you for taking the time to explain an important story in an way that informs and doesn't just exploit the news for the profit of a bunch of politicians and their true constituents--US corporations.

[guajiro]

I feel for the GM employees. Whitacre is a punitive CEO whose every policy is underscored and underlined with the threat of termination at every turn. As former head of SouthWestern Bell he took over many midwest telephone companies where he cut benefits, increased work loads, reduced pensions, reduced service to isolated communities, and managed to get himself an $83,000,000 bonus. Not only that but AT&T in 2008 is now the 8th richest company in the U.S., making more than 80% of Africa's countries. However, I think he'll be out in a year or so. At AT&T he had the luxury of being handed the population of the U.S. and even those companies that supposedly compete with AT&T (CLECS) have to give AT&T or Verizon their cut before they're allowed to do business. Either way, no matter who does business in ATT/Verizon areas they have to pay the Don their cut so the Don (ATT/Verzon) never lose money even when a competitor does business in their area. GM's a different story though. Sure, they have government backing but competitor's don't have to pay a fee to do business in a GM area and so they can undercut GM's prices if they choose to. True competition. Good luck to labor at GM.

[Tulsaslim]

This tool, by his own admission, "knows nothing about cars". Let nature take it's course.

[therealredstateblues]

Whitacre's big claim to fame was announcing he couldn't find any qualified US workers (at the wages he wanted to pay) and prompltly outsourced the AT&T jobs to India

GM has been aggressively building up its presence in India - just finishing up new assembly and engine plants there while at the same time "coincidently" closing assembly and engine plants in the US

Possible connection as to why Whitacre was chosen? Perhaps to further facilitate job offshoring at GM?

[lpress]

It is ironic that an executive who put the interest of his company above that of the government and society should now be running a company that is 75% government owned.

[research]

As long as we do not prosecute war criminals and banksters, many more people will see the opportunity to steal and grab money and power.