Marvin Ammori

This guy named Andrew Keen–who’s made a career of comparing Web 2.0 to Nazism and Marxism, spamming people, trolling, and mis-stating the positions of scholars like Lawrence Lessig–was recently hired by a front group apparently to attack consumer groups like Free Press. The method of his attack is to accuse people of being paranoid, radicals, socialist, etc. He’s like a mini-Glenn-Beck. The phone and cable companies hire many like him.

One of his attacks, on TechCrunch, was subject to disgusted, acidic responses in dozens of comments by readers. Another attack, which he placed in The Hill, goes after Free Press for what is a White House and State Department policy position–that we need to ensure an open Internet at home to have moral legitimacy in arguing for an open Internet abroad. Both attacks are noise–kind of the moral equivalent to his spamming. If you read the comments (and responses) to some of the industry’s other little attack dogs, it turns out informed readers can see through the BS of the distracting trolls.

You wonder why AT&T, Verizon, and others hire such vicious little lowlifes. Really, it’s a mystery. It’s a bigger mystery because, at the same time they hire insufferables like Keen in their front groups, they hire really smart, likable people in-house. While some people have been surprised by this, I like a lot of the lobbyists and lawyers at places like Comcast, Verizon, MPAA, and AT&T. They’re nice people, they’re very charming, they’re very smart. They sometimes argue the sky is falling and the economy will collapse (!!!) if you actually try to protect speech and economic innovation with basic network neutrality rules. But they still find a way to sound almost reasonable while playing chicken little. They’re clearly paid to sound reasonable, unlike Keen and others.

Why would these huge companies–expert in lobbying–pay charming, smart people to sound reasonable as their in-house lobbyists and then pay obnoxious, abrasive charlatans in various “think tanks” and front groups?

I’ve decided there are two reasons, but I welcome other thoughts.

First, when people like Keen are spinning paranoia theories (and comparing Web 2.0 to Marxist communism), that makes the carriers’ lobbyists look far more reasonable in comparison. It’s like buying an extremist so your in-house lobbyists look less extreme. It enables these in-house lobbyists to then decry the “rhetoric,” “vituperation,” or “vitriol” of policy debates–debates they’ve actually intentionally turned vitriolic.

Second, anyone who responds to Keen becomes the “other extreme,” which helps marginalize the carriers’ enemies. For example, Keen is attacking Free Press (a group I advise). Keen’s industry backers then go to government officials and say, “Free Press is too far ‘left,’ this guy Keen a little too far ‘right,’ we’ve got your Goldilocks position, in the middle.” Somehow this works for them, because government folks love a compromise; sometimes, it seems they love being in the “middle” even more than being “correct.” Government officials are usually overworked, under severe industry pressure, and like the idea of a “moderate” choice, perhaps a “win-win,” “compromise,” “middle ground,” rather than taking the intense political heat for pursuing the correct, consumer-focused position to address our nation’s real, long-term challenges. In reality, Free Press is generally correct. Keen is generally nuts (even when he’s not talking communists and Nazis). And the carriers (on the contentious issues where they oppose, say, Free Press) are not correct, not in the middle, but just flat wrong. Creating front groups just helps create an optical illusion of “moderation”–rather than the truth, “wrongness”–for the carriers’ likable in-house lobbyists.

These front groups also put people like me in a catch-22; do I call out the Nazi-likening, Communist-seeking, elitist-extremist? Or does that permit my charming, in-house industry friends to look above the fray and above the noise… moderate if you will?

In short, these front groups exist to distract from real issues, to make industry look reasonable, and to make anyone responding to them look like the “other” extreme, rather than the sensible, consumer-focused policy advocate. It’s for this reason that I tend to turn down invitations to speak on panels sitting besides front-group hacks rather than in-house lobbyists. And I tend not to respond to these people, if I can help it.

But when these corporations–and their charming, “reasonable” lobbyists–continue to hire these professional trolls, they should to be called out for poisoning debate.

Last Friday, an appeals court heard arguments on Comcast v. FCC, which centered on the landmark 2008 FCC Net Neutrality ruling ordering Comcast to stop blocking users’ ability to use peer-to-peer technologies like BitTorrent. The decision was a major victory for consumers—signifying that the FCC would act to preserve an open Internet when phone and cable companies tried to interfere with the applications and content chosen by users.

On Monday, Comcast’s Executive Vice President, David Cohen, published a blog post about the case, where he claimed, essentially, that the FCC had been unfair to Comcast.

Namely, said Cohen, Comcast lacked “fair notice” the FCC would act on consumer complaints about Network Neutrality violations.  Moreover, he said, Comcast lacked fair notice that the FCC would judge Comcast by the standards of the FCC’s well-known 2005 Internet Policy Statement, which declared that Americans are “entitled” to use the legal applications and content of their choice on the Internet.

Although Cohen doesn’t mention this part of the 2008 ruling, the FCC also stated that Comcast’s actions in that proceeding raised “troubling questions about Comcast’s candor,” which is the bureaucratic way to say “lying… a lot… to the public and government, about interfering with the Internet.”

And what Cohen doesn’t say is he has chutzpah to argue about fair notice, as Comcast gave the public no notice at all that it was blocking online technologies.

Notice to Comcast

Let’s take the Adelphia order. In 2006, Comcast and Time Warner Cable bought the cable assets of a company called Adelphia, and the FCC had to approve the transfer.

Free Press and other groups challenged the merger and requested a Network Neutrality condition prohibiting Comcast “from discriminating against providers of content, video, or voice services offered via broadband.”

The FCC rejected the condition, stating that the FCC would accept complaints and judge Comcast based on the FCC’s policy statement: “This statement contains principles against which the conduct of Comcast, Time Warner, and other broadband service providers can be measured.” And the Commission assured consumers  that “[i]f in the future evidence arises that any company is willfully blocking or degrading Internet content, affected parties may file a complaint with the Commission.”

When the FCC says “affected parties may file a complaint,” that sounds like the FCC would actually accept the complaint.  Unless the FCC was welcoming consumer complaints it planned to ignore, Comcast had fair notice that the FCC would act on complaints just like the complaint brought by Free Press and others, for “willfully blocking or degrading Internet content.”

Comcast: Notice for Me, Not for You

Comcast provided the public no notice.

Comcast was blocking online technologies in various ways from 2005 to 2008. Comcast denied the blocking over and over. When one user—Robb Topolski—proved that Comcast was blocking these technologies, Comcast kept lying.

For example, a Comcast spokesperson said, “We’re not blocking any access to any application, and we don’t throttle any traffic.”

Whatever you call that (“a lie”), you can’t call it fair notice.

Yesterday, consumer groups called for government agencies to investigate TV Everywhere – a new scheme that would require Internet users to pay for a cable TV subscription if they want to watch popular shows online. As detailed in a new report issued on Monday, from the public record, TV Everywhere appears to be the product of collusion between major programmers and the big cable, satellite and phone companies to keep content off the Internet.

Spearheaded by Comcast and Time Warner Cable, the TV Everywhere initiative appears to be built on cable operators (and other distributors) agreeing to work together to pressure content providers to make their content available on the Internet only to viewers that have paid for a cable TV subscription in addition to an Internet connection.  Thus, TV Everywhere ties online TV distribution to the existing cable, phone, and satellite distributors’ TV subscriptions. (I refer to all these as “cable,” for brevity.)  Citing news reports, statements by industry executives and other evidence, the consumer groups argue there is enough evidence of collusion and other harms to warrant a full-scale investigation by the Justice Department or the Federal Trade Commission into the scheme. (Docs here; Huffpo post here.)

Unsurprisingly, the cable industry didn’t welcome this critique of their plans. The head of the cable industry lobbying association (known as NCTA), Kyle McSlarrow, responded with a statement. McSlarrow is an effective lobbyist, but his response misses the mark.

His key argument is that TV Everywhere consists of collaboration, not collusion.  He notes that the antitrust authorities encourage collaboration sometimes even among competitors, for the sake of innovation and other benefits.  McSlarrow has a point that some collaboration is not presumed to be anti-competitive; indeed, the  FTC and DOJ have issued guidelines on collaboration among competitors.

But the types of “collaboration” generally found not to harm competition and to further innovation are very different from TV Everywhere.  Collaborations of some types are considered “per se,” or automatically, illegal because they replace the competitive marketplace driving low prices, choice, and innovation with an agreement among incumbents effectively not to engage in competition with one another in certain ways.

Simply put, some forms of collaboration are clearly illegal and anti-competitive.  These agreements include price-fixing and market allocation.  TV Everywhere should be investigated because evidence suggests it includes both price-fixing and allocation.

First, TV Everywhere sets the price for consumers to access much television content online. The price is the cost of a traditional cable TV subscription and an Internet connection plus access to “free” content if you watch advertising. In other words, consumers will pay three different ways.  TV Everywhere also appears to set a term in the negotiations between distributors and programmers — requiring, for one thing, that programmers keep content off the Internet unless a viewer subscribes also to cable TV.  Setting such terms among competitors for suppliers through horizontal agreement appears problematic, and the government should review such agreements and interview participants to the negotiations.

Second, in a world without TV Everywhere, we could expect programmers to compete directly with distributors on the Internet — for example, Hulu (owned by programmers like Disney and Fox) versus Comcast (a traditional distributor).  TV Everywhere unwinds that competition, as people cannot cancel their cable service to watch popular programming exclusively online without also paying for cable TV.  And without TV Everywhere, we could also expect cable companies in different regions to compete with one another online — with a company like Comcast competing against Cox, Time Warner Cable, AT&T, Verizon, Qwest, etc. But TV Everywhere reportedly ties content to a local cable subscription, allocating markets to the current geographical areas served by each distributor. In other words, no new competition.

When they came up with TV Everywhere, cable executives must have understood they were flirting with collusion  — not pro-competitive collaboration. According to the New York Times, “so as to avoid being accused of collusion, much of the discussions” by executives about TV Everywhere “have been on the telephone and in private, one-on-one chats during industry events.”  That is, to avoid being accused of collusion, the executives didn’t stop having the talks–they just tried to eliminate the paper trail.

Comcast’s president likened online competition to a “classic prisoner’s dilemma,” because if each competitor went in a different direction, without agreements, the cable industry’s economics could crumble.  His quote highlights not only that industry participants were discussing competition as a problem undermining their industry’s economics (of high prices and limited choice for consumers), but also that the point of TV Everywhere wasn’t to innovate.  It was to protect the cable business model.

TV Everywhere is designed to be a major development in the TV industry, preserving their existing, limited competition, model for years to come.  Our competitive system rests on companies competing with one another to win in the marketplace, and that competition should yield low prices and increased innovation for Americans.  Our system does not rest on incumbents protecting their turf.  As consumer groups called for yesterday, the antitrust authorities should investigate such an important, potentially illegal and anti-competitive development.