Now Hear This Newsletter, July 31, 2008 Posted by Bob at 07/31/08 11:03 AM

FCC Commissioner Robert McDowell recently wrote an op-ed piece that appeared in the Washington Post titled “Who Should Solve This Internet Crisis?”

In the op-ed, McDowell rushes to the defense of Comcast Corp. and its highly controversial – and likely illegal – throttling of person-to-person Internet traffic, specifically such traffic using a very popular program called Bit Torrent.

A majority of the FCC’s five members are reportedly prepared to take action against Comcast this Friday, when it expected to rule that the company’s throttling activities were and are, in fact, illegal. McDowell makes it clear in his op-ed that he does not agree with that majority.

After parroting the talking points that Comcast and its lobbyists have been spreading around official Washington since the company was busted by the Associated Press for its Internet throttling activities last year, McDowell argues that the FCC needs to defer to big Internet service providers when it comes to the vital information pipeline.

We don’t think anyone should be allowed to control access to the Internet, be it the FCC or a handful of huge corporations. But when a giant corporation such as Comcast clearly demonstrates it is willing to throttle certain types of legal traffic on the Internet the government has a responsibility to come down hard and show such anti-consumer shenanigans will not be tolerated.

Allowing the fox to guard the hen house has almost always been a bad idea. But it is inexcusable when a government official such as McDowell – an official who is charged with looking out for the public – rushes to the defense of a fox who has just been caught with a mouth full of feathers.

While we’re on the subject of the Comcast’s Internet throttling activities, the Wall Street Journal rushed to the company’s defense with an editorial earlier this week that, like McDowell’s op-ed, read like it was drafted by the cable giant’s lobbying office.

You can read it for yourself by clicking here.

We aren’t going to go through a point-by-point deconstruction and debunking of the WSJ editorial here. Instead, we will point you to a pair of very solid blogs that do just that. One is by Craig Aaron of Free Press and the other is by Jason Lee Miller at WebProNews.

Sprint Loses Class Action Lawsuit on Early Termination Penalties

Wireless phone consumers won a landmark victory Monday when a California court ruled that early termination fees charged by Sprint Corp. were unlawful and ordered the company to pay $73 million in damages.

The decision comes as the Federal Communications Commission is considering an industry-sponsored proposal to take away state authority over early termination fees, an action which would effectively short-circuit similar ETF lawsuits and other state level regulations and enforcement against wireless phone companies. Several ETF lawsuits are currently pending in state courts.

Sprint and other wireless companies have long contended ETFs are necessary to recoup losses they claim to have incurred from providing free or discounted phones to customers when they sign up for long term contracts. However, research that became public during the Sprint lawsuit showed the actual phone subsidies paid by wireless companies average only about $14, nowhere near the ETF penalties, which range from $150 to $250 per phone line.

The California decision found these fees are in fact used to lock customers into long-term contracts, preventing consumers from opting for a different provider at any time.

“This is a huge victory for consumers,” says Chris Murray, senior counsel with Consumers Union. “Not only did this case generate an extensive record showing that these fees are not really used to subsidize wireless phones, but are instead simply used to lock consumers into contracts. Contract law says that's illegal. Let's hope the FCC doesn't turn around and give the wireless industry a get out of court free card.”

A similar court case brought against Verizon Wireless was settled out of court earlier this month with Verizon agreeing to pay $21 million.

“Both the Sprint and Verizon cases illustrate that these penalties as currently structured are illegal--they harm both consumers and competition,” Murray said.

comments (2)

1 Posted by Raymond Batson at 07/31/08 04:01 PM

When are "The People going to Win" vs the Corporate structures?

2 Posted by Florence E. Portell at 07/31/08 09:16 PM

No company should have any rights over my access to the Internet, nor have control!