Recently in Net Neutrality Category

Did I call that or what? CTIA - The Wireless Association has filed comments before the FCC

Ok, so yesterday I posted the witness list for today's Net Neutrality/Broadband hearing. I could have woken up at 5am to beat the line standers and get a seat with the lobbyists who pay people to stand in line for them in the halls of the Rayburn building, but I didn't. I could be listening on the Audio Webcast. I tuned in for about 10 minutes, and haven't been impressed yet. I've got other projects, other things to work on, so I'm listening but my attention has not been caught. Why? Have you ever turned on your favorite TV show expecting a new episode and instead getting a rerun, or worse yet, a 3 hour extended version of American Idol? You know what you'll be seeing and hearing. No surprises, nothing to discuss with your friends. Just the same, this hearing, despite a few new faces, was a rerun in a series over the past year or so, including a few at the FCC. 

Rep. Ed Markey (D-MA) and his Subcommittee on Telecommunications and the Internet will be holding a hearing tomorrow on H.R. 5353, the Internet Freedom Preservation Act of 2008. The bill would direct the FCC to figure out exactly how many households get real Broadband service, as well as establish very basic Net Neutrality protections.

Steve Peterman, Executive Producer, Hannah Montana (against)
Mitch Bainwol, CEO, RIAA (against)
Kyle McSlarrow, CEO, NCTA (against)
Ben Scott, Director, Free Press (for)
Walter McCormick, CEO, USTA (against)
Christopher Yoo, CDT (against, academically)
Michelle Coombs, Christian Coalition (for)
Scott Savitz, Shoebuy.com (for)

Besides their live-blogging at Tech Policy Central the kind people over there had some great off-the-cuff commentary on their Twitter stream. 

Courtesy of Free Press

We got this super-cool email from Comcast today.  It outlines their plans, in partnership with Pando Networks to create a Bill of Rights and Responsibilities for P2P users.  P2P users are the people who got their bandwidth throttled when they used "too much."  This announcement is really exciting because it moves towards something that I'm pretty vocal about - giving consumers all the info about a product or service so that they can make the decision that's best for them.  Comcast and Pando are both deserving of a big big BIG "Way to go!"

 

Here it is, right from Comcast.

 

For Immediate Release

 

Comcast and Pando Networks To Lead Creation of "P2P Bill of Rights and Responsibilities" for Peer-to-Peer Users and Internet Service Providers

 

Companies also announce plans to test Pando Network Aware? P2P technology on Comcast's network to identify faster and more efficient ways to deliver legal P2P content

 

Philadelphia, PA and New York, NY - April 15, 2008 - Comcast Corporation and Pando Networks, Inc. announced today they will lead an industry-wide effort to create a "P2P Bill of Rights and Responsibilities" (BRR) for peer-to-peer (P2P) users and Internet Service Providers (ISPs).  The two companies plan to collaborate and engage with industry experts, other ISPs and P2P companies, content providers and others to set a framework for the BRR that can serve as a best practice.  The purpose would be to clarify what choices and controls consumers should have when using P2P applications as well as what processes and practices ISPs should use to manage P2P applications running on their networks.  For example, P2P users should have the right to control their computers' resources when using P2P applications.

 

In addition, Comcast and Pando plan to conduct a test of Pando Network Aware? P2P technology on Comcast's fiber-optic network.  The purpose of the test will be to capture and analyze the data flow associated with downloading a file using Pando's P2P application.  These tests, along with tests Pando will conduct on a variety of other ISP networks, including cable, DSL, fiber and wireless, will measure things like performance, speed, distance and geography as well as the bandwidth consumption impact to the ISP.  Comcast, Pando and the P4P Working Group plan to publish the results of these tests so other ISPs can benefit from understanding how P2P applications might be optimized for traveling over different types of networks in different environments and geographies.

 

Today's announcement builds on Comcast's March 27^th announcement to collaborate with BitTorrent and the broader Internet and ISP community to more effectively address issues associated with rich media content and network capacity management.  It also builds on Pando's recent announcements of its P4P test results which demonstrated Pando's ability to reduce network congestion and speed content delivery by routing P2P traffic more effectively across cable, DSL, and fiber broadband networks.

 

The Pando test will provide additional data to help Comcast migrate to a protocol-agnostic network management technique by the end of this year.  The arrangement is yet another example of how these technical issues can be worked out through private business discussions and without the need for government intervention.

 

"Working together, Comcast and Pando can help lead the discussion about what consumers should expect in terms of a 'P2P Bill of Rights and Responsibilities' for P2P users and ISPs," said Tony Werner, Comcast Cable's Chief Technology Officer.  "Doing so is in the best interest of everyone involved - ISPs, P2P companies and consumers.  We hope to get other industry experts, ISPs and P2P companies together this spring and publish the 'P2P Bill of Rights and Responsibilities' later this year.  By having this framework in place, we will help P2P companies, ISPs and content owners find common ground to support consumers who want to use P2P applications to deliver legal content."

 

- MORE -

Comcast and Pando announcement PAGE 2

 

"At Pando, we have always believed that good P2P applications give users control.  Now we are committing to lead the industry in codifying that," said Robert Levitan, CEO of Pando Networks.  "In addition, we need more data and analysis of how P2P applications deliver content over a variety of different networks.  By sharing the test methodology and results, all P2P companies and ISPs can learn how to more efficiently deliver legal content.  This will ultimately benefit consumers who are relying on P2P programs as well as content providers who are interested in delivering their content to consumers where and how they want it."

 

 

By now everyone is buzzing/blogging/bitching about this article where VirginMedia's CEO claims to be negotiating secret deals to have his content delivered, undermining so-called "net neutrality" principles. Money quote:

In an interview with the Royal Television Society's Television magazine, Berkett said that "this net neutrality thing is a load of b****cks", and revealed that Virgin is already in talks with unnamed content providers about paying to have their content delivered faster than others.

Just a bit of fact-clarifying for everyone:

1. Virgin Media is in the UK. The UK has a completely different infrastructure for content delivery than the U.S. does.
2. Because there is much more state-run media in the UK, their regulator "Ofcom" has far more authority to regulate content delivery systems.
   
3. Despite Ofcom's previous statements to be "hands-off" I suspect that these types of comments will probably inspire some kind of action.
4. None of this has anything to do with the U.S. where the largest Cable provider is a known enemy of FCC Chairman Kevin Martin (aka K-Mart) for their refusal to acquiesce to his desire for "a la carte" programmming.
   

Calm down, everyone. This is bloviating with no concrete effects. Wait and see.

Reuters (in an article devoid of links to scary websites) broke the news that Comcast is working with BitTorrent to rework its network management policies to be more neutral.  While it will still reserve its right to curb a super user's bandwidth if it starts to decrease the usability of the service for others, it won't take in to account what that super user is using the bandwidth for.

 

Here's a snippet from Reuters

 

Comcast's announcement on Thursday drew a tepid response from Martin.

The FCC chairman said in a statement he was "pleased that Comcast has reversed course." But he questioned why the company was not moving more quickly to end the practice of blocking some applications.

"While it may take time to implement its preferred new traffic management technique, it is not at all obvious why Comcast couldn't stop its current practice of arbitrarily blocking its broadband customers from using certain applications," Martin said.

 

In April the FCC will have a meeting at Stanford University (home of Professor Lessig) to try and define exactly what in the heck constitutes "resonable network management."

 

Finally.

 

 

Here's Comcast's official press release.

We've taken a break from discussing spectrum and stuff and moved on to good things the Internet is used for. Up there, we've got Craig Newmark of Craigslist. 

Bonus Round! Craig was nice enough to talk to me for a few minutes, and here he is...

...because it would keep ISPs from becoming shills and police for the movie industry.

"This is a high-stakes debate," Glickman said. "Do we take a stand for intellectual property rights or cast them aside in the digital environment? Are we permitted to respond to consumers, innovate on their behalf and compete with the world, or are we told by our government to stand down? Today, the MPAA and all of our studios are standing up in opposition to broad-based government regulation of the Internet."

During his speech, Glickman stressed that such legislation would severely harm anti-piracy efforts, a matter of concern to everyone in the film industry. "No one here needs a lecture on what happens when one illegal copy makes its way to the Internet -- God forbid on opening weekend -- and is instantly available," Glickman told the movie theater owners, studio execs and others. 

"Today, new tools are emerging that allow us to work with Internet service providers to prevent illegal activity. [But] new efforts are emerging in Washington to stop this essential progress. This effort is being called by its proponents 'Net neutrality.' It's a clever name," Glickman continued, "but there's nothing neutral about this for our customers or for our ability to make great movies in the future." 

Let me get this straight: Net Neutrality is a bad idea because it would make it hard for providers to restrict what a third party thinks might be copyrighted content? Please. How about you develop a new business model to fit today's market and stop living in the 1990's. Don't you miss dialup?

Judiciary Committee Chairman John Conyers (D-MI) is about to jump into the net neutrality fray.  Although ISPs limiting users' access to certain content, like BitTorrent video transfers, under the guise of "reasonable network management" has gotten more press lately, there's another issue to look at.

 

Here's a very brief excerpt from the article at Reuters

 

By Peter Kaplan

WASHINGTON (Reuters) - Congress may have to stop broadband Internet providers from charging content providers higher fees for priority access to the Internet, a senior House of Representatives Democrat said on Tuesday.

"I am concerned that if Congress stands by and does nothing, we will soon find ourselves living in a world where those who pay, can play (on the Internet), but those who don't are simply out of luck," Judiciary Committee Chairman John Conyers said.

 

 

 

 

This is almost the reverse of the issue that we've covered so heavily.  As opposed to limiting a customer's ability to access someone's content they're limiting a company's ability to distribute the content by way of higher service fees.  Does it make sense that ISPs would want to charge a higher rate to businesses because they're more likely to use a lot of bandwidth?  Sure.  But unless it is made very clear how that pricing is determined we could run into trouble.  If it's settled on as a pay-by-usage syste, like your water or electric bill, then they'd get the (implied) desired effect of limiting the ability of competing companies (like companies who provide competing video on demand content, for instance) from distributing their content.  If a suit was filed the ISP could very easily say "Hey, we make it very clear that businesses pay $xxx for xxxMB of access each month.  We couldn't care less what they're using the bandwidth for." and be reasonably safe.

 

Either way, we're still in potentially dangerous territory.  We're still trying to regulate how public companies provide access to public space.  If there's anything that walks the tightrope between what is and isn't within the Government's jurisdiction, I think this is it.

 

Hopefully, the Government and the ISPs can keep the best interest of the public in mind while they work it out.

 

 

I'm sitting in a panel featuring Daniel Graf from Kyte TV, Eric Steuer from Creative Commons, Carlton Evans from The Moxie Institute, and Robert Scoble of FastCompany.tv.

CNNMoney.com had an interesting story about Hulu.  For those of you (like me) who are just hearing about it, Hulu is a joint project between NBC and FOX - that's right, a partnership between NBC and FOX - with the aim of providing a legal online venue for viewing their content.

Here's a little bit right from CNNMoney.com's  article

In May, Providence Equity Partners offered a cool $100 million for a 10% stake - giving the nascent operation an astonishing valuation of $1 billion.

But the secret of Hulu's initial success - the thing that made believers out of the skeptics - is the power and simplicity of the website itself. Hulu's creators focused with almost obsessive attention to detail on the user's experience. The first thing you see when you visit Hulu is a big screen offering a TV clip with a prominent "watch now" button. You can scroll through a half-dozen of these featured offerings, browse the most popular episodes, or search shows by name - from vintage NBC series like McHale's Navy to the latest episode of Fox's The Simpsons. Hulu even lets you search for competitors' content, like ABC's Desperate Housewives. "If it's legally available anywhere on the web, we want to take you to it," says Kilar.

For folks like me, this is great.  I'm in an area where over-the-air Television signals are sporadic at best and I can't afford pay TV.  I am a huge nerd was turned on to Terminator: the Sarah Connor Chronicles and was told that FOX.com had full episodes available online.  I checked it out, and it's true!  At the time I checked it out they had from episode 4 through the second-to-last episode.  The ads only totaled about 3 minutes per episode, and only the most recent episodes even had ads at all.  You can go all the way up to full-screen and it looks great.  They also post incredibly fast.  The season finale was last Monday.  The site says that new episodes will be up "1-2 days after the TV broadcast."  The finale (in its entire 2-part glory) was up on Tuesday.  

I'm really impressed with what FOX has done and am anxiously awaiting my "invitation" to sign up with the Hulu Beta.  If you check out their site you can watch whatever the current featured video is.  I personally think that everyone should register for a beta account, if for no other reason than to let FOX and NBC that they've got the right idea.

This is something that I've talked about before when I posted on a Retuers article about how somewhere in the neighborhood of 70% of Americans get their news online as opposed to from traditional (TV/Radio/Print) sources.  Old media companies can sit back in fear of the internet and throw out the occasional insult or they can embrace it.  As I said before, I'm a firm believer that the ones who are of the embracing variety are going to see the most success.

Something else it brings to mind is the current net neutrality row.  Much like BitTorrent and VUZE, Hulu could see its users suffer bandwidth losses and in turn have their usability limited by ISPs who favor their own VoD content but hide behind "reasonable network management."  Maybe Hulu, with its incredibly powerful partners, can stand up for net neutrality and fight the big internet providers on a level playing field.

To end on a more positive note, is there anyone reading who already has a Hulu account?  Let us know what you think about it.

We've had a string of posts on Comcast's repeated anti-consumer actions regarding "reasonable network management" and their throttling of BitTorrent downloads.  We also covered the fact that they hired people to take up space at an open FCC hearing on the subject to keep out people who might not have been there to cheer for Comcast.  Now their shenanigans have brought Net Neutrality into the spotlight and FCC Chairman Kevin Martin may be ready to make his move.

The scoop from Broadcasting & Cable

By John Eggerton -- Broadcasting & Cable, 3/3/2008

The issue of network neutrality was back with a vengeance last week, with Comcast in the hot seat and FCC Chairman Kevin Martin leading the interrogation.

Network neutrality is an umbrella term for the debate over whether the FCC or Congress needs to spell out what broadband networks--essentially, an entity like Comcast.net that provides an Internet connection to customers--can and can't do in managing Internet traffic to their customers.

Martin said last week he thought the FCC had the authority to fine or otherwise penalize Comcast if allegations of blocking peer-to-peer file-sharing services are true. Comcast says the allegations aren't true, but according to Martin, the FCC is taking the matter very seriously.

It certainly seemed that way. At a day-long open meeting on network management practices last week, Martin repeatedly grilled pro-network-neutrality advocates about the allegations against Comcast, which was represented at the meeting by Executive VP David Cohen.

More fuel was added to the fire after activists accused Comcast of packing the meeting with its own executives. Comcast denied that but admitted to hiring line-sitters, not to keep out the public, but rather to accommodate its interested employees.

...

And while trying to define "network neutrality" was the seemingly impossible quest when the issue dominated the telecom agenda in the last Congress, "What is 'reasonable network management?'" appears to be the $64,000 question this time around.

The issue is more than an academic question for content companies. Much of the bandwidth-heavy content in question is the sort of high-resolution video that studios and networks are increasingly putting on the Web.

Indeed, the other company complaining about Comcast, online content distributor VUSE, pointed out during the hearing that the content it is distributing using the peer-to-peer application includes programming from CBS, Showtime, A&E and others.

Mike McCurry, co-chair of Hands Off the Internet Coalition, the anti-regulation net-neutrality group, contends that legislation, rather than FCC enforcement of its own guidelines, could be a big problem. "[Content providers] really need to watch this debate because regulated network neutrality is a killer for them," McCurry says. "It basically makes it impossible for network providers to manage data flow that would give the consumer a satisfactory experience."

McCurry says that Rep. Ed Markey (D-Mass), House Telecommunications and Internet Subcommittee chairman, is clearly signaling that this will be the year for the debate because the U.S. will have a new president, a new commission and a new Congress in 2009. "It is a good time right now for people concerned, particularly the content providers, to think about what kind of universe they want to live in," he says.

So Comcast's actions have brought it to the forefront, but now what?  The content providers are sure to argue (probably on their own, sadly) that there should be true neutrality and that the ISPs should just provide the gateway to the content and call it a day.  I'm sorry, but that won't happen.  Do you really think that multi-billion dollar companies are going to accept legislation that effectively says that they have no control over their own network?  I'm sorry, but no.

If the various content providers would band together, maybe with VUZE, the so-far largest and most vocal, at the helm they'd have a better chance of reaching a compromise that doesn't favor the "big boys"; the ISPs.  This definitely plays into one of Andrew's big things, which is that a lot of tech companies seem to ignore Washington.  If the content providers were represented by one single entity they might have the weight, not to push around, but to bargain on an equal lever with Comcast, AOL Time/Warner and Cox.

Time/Warner mentioned possibly going to a pay-per-use system where, like your electric bill, you would get charged accordingly with your usage.  That way, instead of limiting high-bandwidth users who pay the same flat rate as casual users they would just pay more.  Unfortunately, Comcast's actions have forced the FCC to jump in and probably in a big way.

With all the changes in Washington in the next year everyone will be looking to make their mark - can you really make a bigger mark than the one you'd make by putting a giant like Comcast in their place?

With the Democratic-led House leading a shaky blockade against the Bush administration's plan (well, Bush and Sen. Jay Rockefeller (D-AT&T)) for telecommunications companies to receive retroactive immunity against lawsuits for their participation in any illegal warrantless wiretapping, many Republican lawmakers and candidates are wondering why there isn't more campaign cash flowing in from those same companies. Roll Call elaborates:

Like most corporate interests with a heavy stake in Congressional action, the major phone companies significantly boosted their contributions to Democrats last year after the party surged back into the majority.

But giving by that sector is getting special attention from Republicans now that the debate over the surveillance program is front and center -- and focused on the phone companies' role in aiding the Bush administration after the 9/11 terrorist attacks.

"It's quite discouraging," said one GOP leadership aide, referring to the disparity in giving from the telecommunications industry in light of the FISA debate, but also the broader lack of support for Republicans from the business community in general.

"These companies just won't do anything," the aide said. "Even when you have the Democrats working against their bottom line."

Of the four major phone companies, only Sprint is now favoring Democrats overall, giving the majority party about 57 percent of their PAC contributions, according to CQ MoneyLine.

The other three companies, AT&T, Verizon and Qwest, still give a majority to Republicans but by slimmer margins than in years past.

AT&T gave Democrats 38 percent of their PAC dollars last year, up 8 percentage points from the 2006 cycle; Verizon gave them 47 percent, up 10 percentage points from the last cycle; and Qwest gave them 49 percent, a 22 percentage-point boost over 2006, according to records from the FEC and CQ MoneyLine.

So, really the problem isn't that they're not donating, it's that they're donating more equally than they were before the 2006 elections, when there was a GOP lockdown on both chambers. While it's sexy to talk about wiretapping and immunity, the real battle is, as always, over "open access" and fees. Ed Markey (D-MA), Chairman of the House Energy and Commerce Subcommittee on Telecommunications and the Internet, held a hearing on this subject last fall, and after the conclusion of the 700mhz auction, I would bet on more hearings being held over the question of wireless "open access" fees.

Sun Microsystems missed the boat in a huge way. They ignored Linux until it wasn't cool to ignore Linux anymore, and by then they were almost as deep in as Silicon Graphics, which barely exists anymore. Remember them? I always wanted to own a SPARC or an O2, but Linux was so much better, and it ran on hardware that I could afford. We know where that battle ended.

McNealy still thinks he's smart, and so he says that telcos need to serve up content or die, as opposed to say, providing services in accordance with their FCC licenses issued under the Telecommunications Act of 1996, which amended the Telecommunications Act of 1934:

"I have explained to every telco that either you become a destination site, or the destination site will become a telco...I think the telcos have to make sure they don't get marginalized to just being bit providers and bandwidth providers"

Um...did he miss the FCC hearing Monday, when one of the Commissioners (I forget who) noted that if Comcast didn't offer Video on Demand service, that their restriction of Vuze's BitTorrent-based video content would have not been an issue?

Telcos have much to gain through R&D, competition, and being honest brokers. In fact, by law that's what they are. McNealy obviously knows very little about communications law, policy, or the history such concepts as the common carrier, Stratton-Oakmont v. Prodigy or the recent Net Neutrality debates.

Oh, yeah. Speaking of too-little, too-late:

"During a speech earlier in the day, McNealy slammed the U.S. government for not being interested in adopting open-source software. McNealy said the farther he gets from Washington, the more governments get interested in open source."

Thanks for finally jumping on the bandwagon, Scott. You recieve no points, and may god have mercy on your soul.

Drew Clark reported for TechDaily for a long time. He also runs the Broadband Census. So, I pretty much take what he says about the Cable/Internet industry as gold, and I won't try to "reinvent the wheel" by saying something better than he does. I missed this story yesterday where he does a good job of explaining the hole a certain cable operator is in, both politically and technically.

After going into some background on Monday's FCC hearing which we both covered, Drew notes the back story:

Besides, Comcast is not a very good FOK, or Friend of Kevin -- as in Kevin Martin, the chairman of the agency. Martin has done nearly everything in his power to harm Comcast and the cable industry since he took over the FCC in March 2005.

 

That political battle with the cable industry is all about a la carte, or per-channel television programming.

So, the company that fought tooth-and-nail to keep Net Neutrality off the table last year has a guy who really, really doesn't like them. As we reported yesterday, the "family tiers" were the compromise to Martin's a la carte proposal. Martin is apparently still a bit miffed. It also didn't help that the Verizon VP who was at the hearing said that Verizon doesn't need to manage their network at all. Drew (who was at the hearing) even noticed the name tags:

 

Note even the pre-ordained and subtle digs, visible in this photograph: It is "The Honorable Tom Tauke" on the left, but merely "David L. Cohen" on the right. (Tauke received this honorific because he is a former Congressman, a Republican from Iowa.)

 So, when you walk in with a politically stacked deck, and the other guy says he doesn't even need to do what you're accused of doing...that's bad. But when you admit that your product has a technical limitation, and he manages to plug his products? Ouch. Quoth Mr. Clark:

 

The basic problem for Comcast is that users of P2P applications like BitTorrent do consume an extraordinary amount of bandwidth . But BitTorrent users aren't hogging the fat, downstream pipe that cable offers. It's the the scrawny upstream trickle that everyone is fighting over.

 

DSL service, in general, has the same "asymetrical" character, offering far greater downstream speeds than upstream speeds. But the cable modem service's shared network compounds this problem.

 

Contrast this with the message that Tauke imparted. Given the capacity of Verizon's fiber optic service (FiOS), "at the current time, we do not have the necessity of thwarting or curtailing traffic." Tauke even touted Verizon's 20/20 service, or 20 megabits downstream and 20 megabits upstream. The Bell company announced this symmetrical during the same week in which the revelations of Comcast's BitTorrent behavior surfaced last fall.

At this point, I'm going to stop keeping score. Thanks, Drew.

Two gems today before I head to the office. First is from B&C:

NBC is working with Pando Networks, a peer-to-peer content-delivery-technology company, to revamp its NBC Direct service...

...

The NBC Direct Service lets users download high-resolution, ad-supported versions of NBC shows including 30 Rock, The Office, Heroes, American Gladiators and Late Night with Conan O'Brien. The service -- currently only available for PCs using Internet Explorer -- uses P2P technology to quickly and efficiently download the shows, which are automatically deleted after viewing or after a viewing window has lapsed. Taking a cue from TiVo, the service lets users "subscribe" to their favorite shows, automatically downloading new episodes when available.

NBC will use Pando technology to improve the efficiency of its P2P-delivery system, as well as protecting it through encryption and digital-rights management, including "hash-matching, digital-fingerprinting and content-watermarking technologies," according to Pando.

If you read this space last week, you'd remember that NBC filed comments with the FCC against Vuse, making an uncited assertion that "at least 50% of broadband capacity is taken up by a small minority of users (about 5%) using peer-to-peer networks to traffic in pirated music, video and software." It is a bit interesting that so soon after Monday's hearing that they have announced their intention to use P2P technology to distribute their lawful content, presumably with the expectation that it will not be throttled or blocked by ISPs, especially ones with competing Video On Demand service.

I guess you need a network TV weatherman to know which way the FCC wind blows. Apologies to Bob Dylan.

Next up, the Senate joined their friends in the House of Representatives yesterday in passing legislation giving cable and VOIP providers like Vonage equal access to 911 systems, so that operators can determine the physical location of a call. To their credit, the differences between the bills should be easily fixable, according to House Energy and Commerce Committee Chairman John Dingell (D-MI). In a statement yesterday, Dingell said:

"I am confident that we can resolve the minor differences between the House and Senate legislation in short order...and present a final measure to the president."

With GPS becoming more common on mobile phones, hopefully this will pave the way for more confidence in the 911 system, and faster responses to emergencies for all, no matter who you get your phone service from. Kudos to the FCC for leading the way, and to Congress for putting more teeth behind the initiative. Sometimes these guys really do get things right for the right reasons.

The NPD group, a market research firm, reports that not only did legal downloads increase in 2007, they grew to the point where Apple is now only second fiddle to Wal-Mart in the distribution of music.

Legal music downloads now account for 10 percent of the music acquired in the US. Reflecting the growth in that sector of the market, Apple's iTunes Music Store became the second-largest music retailer in the U.S. after Wal-Mart, based on the amount of music sold during 2007 (based on a 12-track CD equivalency for music track downloads).

Twenty-nine million consumers acquired digital music legally, via pay-to-download sites last year, which is an increase of 5 million over the previous year. Sales growth was largely driven by consumers age 36 to 50 - a segment that was aggressively acquiring digital music-players in 2007.

"The continued growth in legal download sites is encouraging, yet the industry struggles to improve the value of each digital customer," said Russ Crupnick, entertainment industry analyst for The NPD Group.  "With so many baby boomers and gen-Xers entering the market, there are certainly opportunities to sell more digital albums, promote older catalog titles, or create bundles that will raise revenues. In the near term that's going to be the best means available to narrow the gap on dwindling CD revenues."

Seeing as their success as a retailer rests entirely on the goodwill of those who operate the network infrastructure, you really have to wonder why Apple is keeping their mouths shut on Net Neutrality. 

For their sake, I hope that no broadband provider wants to partner with Wal-Mart to deliver a music library via set top box. iTunes traffic might suddenly take up too much bandwidth and need to be "managed."

Here's the Wikipedia entry on Icarus, if you're not up on your Greek mythology:

Latin: ?karos, Etruscan: Vicare) is a character in Greek Mythology. Icarus' father, Daedalus attempted to escape his prison, the Labyrinth, in which he was imprisoned at the hands of King Minos, the king for whom he had built the Labyrinth (Labyrinth is derived from the Minoans word for a ceremonial axe). The Labyrinth's original purpose was intended to hold the horrible creature, the Minotaur, a beast that was a product of one of the King's mistress's affairs with a bull. The Minotaur was born to King Minos and his wife instead of a son because the Gods were angry at them. Daedalus was imprisoned on the island with his son Icarus. Daedalus, the master craftsman, was imprisoned because it was he who built the faux cow for the queen to climb into such that she could copulate with the bull. As the Minotaur grew up it became violent and dangerous, so they had to imprison it in the Labyrinth. Daedalus fashioned a pair of wings for himself and his son, made of feathers and wax. Before they took off from the prison, Daedalus warned his son not to fly too close to the sun, as the wax would melt, nor too close to the sea, as the feathers would become sodden. Overcome by the sublime feeling that flying gave him, Icarus soared through the sky joyfully, but in the process he came too close to the sun, which melted his wings. Icarus kept flapping his wings but soon realized that he had no feathers left and that he was only flapping his bare arms. And so, Icarus fell into the sea in the area which bears his name, the Icarian Sea near Icaria, an island southwest of Samos.^[1]

Think of Wal-Mart and any single telco as the sun...

Remember a few years back, when at the urging of FCC Chairman Kevin Martin (R), Cable Television providers started offering "family tiers" of service? When certain groups complained about not being able to get rid of channels with content that offended them, they demanded the ability to "unsubscribe" from them, or purchase the ones they wanted "a la carte."

Obviously, the cable companies did not like this idea, so they compromised. Comcast, Time Warner, and Cox, the "big three" of cable television, started offering "family tiers," or packages without the channels that some considered too racy. In effect, they gave customers the option to "opt-in" to having the selection of channels they received be censored.

Yesterday, in this space, I wrote about a Utah legislator's proposal for "family-friendly" Internet service. I thought it was a good idea that parents, or anyone who wanted content-filtered service (schools, some businesses, etc) could have the option of paying for it instead of filtering software that is often questionable in effectiveness.

Just two days ago, the FCC held hearings on Comcast's alleged throttling of BitTorrent traffic. One of the issues raised was that of transparency, that when people buy what they think is "unlimited" service they are really agreeing to Terms of Service that let the ISP do certain things to manage the network.

Whether or not what Comcast did was proper is up to the FCC to decide. On the other hand, if the cable companies can offer "family tiers" and Utah can have "family" broadband, why can't the broadband providers offer a "tier" of service that is truly "all-you-can-eat" for the power user? Much was made of the need for "full disclosure" of restrictions on bandwidth by broadband providers. I agree that this is true. You should know what you are buying, and you should get what pay for. If a small percentage of users really does use such a large percentage of bandwidth, they should be offered the option of paying for the ability to truly use as much as they want.

Network management is reasonable. Full disclosure is reasonable. Paying a premium for guaranteed maximum bandwidth is totally reasonable. The market for "all you can eat" broadband exists.

If you build it, they will come.