July 29, 1999

Chairman William Kennard
Federal Communications Commission
445 12th Street SW, 8th Floor
Washington, DC 20554

Dear Chairman Kennard,

We are writing to follow up on our meeting with you and your staff on June 21, 1999, concerning the question of open access to the Internet delivered through cable infrastructure. We believe that current FCC policy, if unchanged, would strip the Internet of the very qualities that have made it one of the most powerful vehicles for expression and economic growth ever created.

When we met, we discussed what it meant for a cable modem platform to be "open." At that time we expressed strong concern that the closed nature of the cable platform would have a significantly adverse impact on content unaffiliated with the cable operators. We said that cable broadband operators, by exerting total control over the content, the conduit, and the technology, would be able to directly discriminate against unaffiliated content. In response, you expressed confidence that the cable modem platform was "open" to all content and assured us that cable companies were committed to allow "click through" access to all Internet content.

We write now to provide further information that makes clear why the "click through" commitment made by cable broadband providers is illusory and cannot be substituted for a real policy ensuring an open Internet. Based on our initial findings, we believe the FCC has placed the future of the Internet in jeopardy.

As currently designed and deployed, "click through" access in cable-based broadband architecture does not guarantee non-discriminatory access for independent ISPs.

First, the cable broadband networks can be intentionally manipulated to provide wide bandwidth to the user for commercially affiliated content, but significantly less bandwidth for generic and cable-unaffiliated Internet traffic. One might envision the bandwidth offered by the cable modem network as a funnel, with the wide end being last mile bandwidth and the narrow end being the connection to the Internet. The cached content of the service provider affiliates is located in the middle of the funnel, while non-affiliated sites have no means to bypass the bottleneck. According to anecdotal accounts, cable modem users typically have access to Internet content at speeds below 200 kb/s while their access to cached content is often at speeds exceeding 1 mb/s (5 times as fast).

Furthermore, using Quality of Service controls (QoS), cable providers may discriminate against non-affiliated content in even more distressing ways. For example, non-cached streaming video could be limited using QoS to 50 kb/s (even though the total Internet bandwidth available might allow every user to have 200 kb/s) (1). This effectively limits that streaming video to a small window at a dozen frames per second (low quality, jerky video). At the same time, cached streaming video, unavailable at any price except to cable operator's chosen affiliates, comes to users at 1 mb/s, allowing full screen, TV quality video. In essence, cable companies have the ability to crimp the hose based on whether content is viewed as competitive in any manner.

As @Home has already done, it can limit transmission of streaming video from outside sources to 10 minutes. In fact, Cisco's "Controlling Your Network" discusses how cable operators can "prevent outside content providers from disrupting the cable network by delivering broadband content without authorization granted by the MSO."(2)

We understand that there are appropriate and legitimate needs for quality of service controls. However, without oversight and proper incentives, such controls can and will be abused. You may have read recently that the @Home service instituted (without notice to its customers) a change in its service which it referred to as the "ONAdvantage Upstream Enhancement."(3) This supposed "enhancement" restricts members of the public from uploading materials faster than 128kb/s (previously, users were not restricted and some users reported upload speeds of approximately 1mb/s - 8 times as fast as what @Home offers now). Although this limitation is troubling in and of itself in a medium where all users can be producers as well as receivers of information, we were intrigued with the software that makes such controls possible. This practice decisively undercuts the cable industry's fanciful claim that their network is a "shared" one without the ability to assign set amounts of bandwidth to certain users. It thus belies their arguments that a so-called "bandwidth hog" problem precludes opening the network to competitive ISPs. Not only is that not the case but the cable operator has the tools to exert exacting control over the upstream and downstream content.(4)

The cable-based architecture that is being deployed will support sophisticated and subtle discrimination against non-affiliated ISPs that will not be prevented by promises of "click through" access, and will be extremely difficult for the Commission to detect and eliminate.

However troubling these examples are, they are just the tip of the iceberg in how the Internet is being fundamentally reconfigured to serve the cable industry's monopoly business model. While consumers may be able to "click through" to unaffiliated content, they are not assured that the content they seek will be delivered at the same speed or with the same quantity or quality as affiliated content. As the Commission should know, the network architecture and software employed in cable broadband access can be manipulated to create artificial bottlenecks to unaffiliated content. This capability is real, not theoretical. Controls already in place are extremely sophisticated, allowing cable operators to "...isolate network traffic by the type of application, even down to specific brands, by the interface used, by the user type and individual user identification, or by the site address."(5) These network controls allow operators to police and limit particular kinds of network traffic based on policy decisions as to what priority different types of packets should receive.

Based on documents describing off the shelf equipment currently in place and other equipment now being deployed by cable internet service providers around the country (including, but not limited to, @Home and RoadRunner) we know that modern cable modem termination system (CMTS) equipment comes with numerous controls built in. Using modern CMTS equipment, cable system operators have networks that allow them to do the following:

• Limit upstream bandwidth for specific users or classes of users
• Limit downstream bandwidth for specific users or classes of users
• Restrict Internet bandwidth based on site address
• Partition and prioritize Internet bandwidth based on type of content, even according to brand
• Enforce policies they have developed that prioritize data service according to packet type (Web, e-mail, voice, video, etc.)
  

As cable-based broadband architecture is being deployed, "click through" access does not prevent preferential marketing practices that favor affiliates and undermine independent ISPs.

The impact of this architecture on competition and the distribution of economic opportunities can not be overstated. Small entrepreneurs, especially those who have planned to use the Internet to target market niches based on cultural, ethnic, language or other characteristics, will be at a decisive disadvantage in seeking to challenge established competitors who can afford to purchase "preferred" or "exclusive" positioning from a cable ISP.

Indeed, Cisco makes clear in its document to cable operators distributed at the recent NCTA show, that its cable broadband network can be used to steer citizens to affiliated content and divert attention from the rest of the Internet. More specifically it claims the ability to limit the potential of unaffiliated e-commerce sites to conduct broadband transactions with cable customers. There are several ways in which this can be done.

As we noted above, crimping bandwidth is only one way in which competitors can be limited. Specific content, regardless of type, can be limited based on its origin. If a cable company decides that traffic from Yahoo! should be limited, they have the ability to do so. Similarly, specific types of content, regardless of its origin, can be limited as well. For example, if a competitor creates a new, more efficient technology for compressing video-but is not affiliated with the cable industry-cable ISPs can simply limit the bandwidth available to content of that type to an unusable level, effectively hamstringing any competitive content provider that would use that new technology.

As cable-based broadband architecture is deployed, "click through" does not prevent discriminatory pricing for independent ISP's or ensure fair pricing for consumers

The cable-based broadband architecture that is being deployed demands is wedded to a business model that is based on discriminatory pricing of access. The "click" in "click through" inevitably involves a charge for access that undermines the ability of independent ISPs to compete. The architecture is designed and deployed to ensure that the monopoly rents associated with access can be captured and maximized by the cable operator.

We are also concerned that the cable broadband architecture being put into place is being accompanied by a strategy to end "flat-rate pricing" to the Internet. As suggested by one major equipment vendor, "by collecting detailed statistics on the quantity and type of data being sent by each customer, cable operators can break through the flat rate pricing model and bill for the true value of services used." (6)

These technologies are being developed by a number of different providers, including Cisco, 3Com, and Nortel, and have already been deployed in numerous locations by multiple cable providers.(7) Unless real open access is provided, consumers will soon discover not only that they have no choice in broadband service provider, but that their full access to the vast resources of the Internet has been limited as well. As you know we strongly disagree with your decision to engage in "watchful waiting" with respect to competition in the cable modem marketplace. But if you are to engage in "watchful waiting" it is critical to know precisely what you are watching.

It also concerns us that this is happening at the same time as the cable industry is undergoing massive consolidation under the AT&T umbrella. The combination of the historically closed video programming clout of these companies with a closed, discriminatory Internet access model is cause for grave concern. This represents a coordinated, national strategy on the part of the affiliated and/or closely aligned companies dominating the cable industry to a single, closed, discriminatory information medium. Since there is still, in most parts of the country, effectively no competition for cable modems or cable programming, the practices of the cable industry must be subjected to the strictest scrutiny.

We are troubled that the FCC's current policy of "watchful waiting" will, in reality, allow the future of the Internet to be placed at the service of the cable industry. To allow cable to proceed unfettered simply ignores the industry's well-documented history of thwarting competition, program access, and innovation.

Cable's data business model, combined with the capabilities of technologies already being deployed, and the industry's extensive anticompetitive history, require that the FCC change its current policy of "watchful waiting," and conduct an immediate full public inquiry. The inquiry should address the risks posed by this emerging model to both TV competitiveness and the vibrant marketplace of ideas that the Internet represents. Based on this inquiry, the FCC should articulate a clear "openness" policy for broadband deployment. Such a policy should create a framework and a set of guidelines for ensuring a truly free and competitive broadband marketplace.

Sincerely,

Jeffrey Chester
Center for Media Education

Mark Cooper
Consumer Federation of America

Gene Kimmelman
Consumers Union Washington, DC Office

Andrew Jay Schwartzman
Media Access Project

Patrice McDermott
OMB Watch

cc:	Commissioner Susan Ness Commissioner Gloria Tristani Commissioner Michael Powell Commissioner Harold Furchtgott-Roth Senator John McCain Senator Ernest Hollings Representative W.J. "Billy" Tauzin Representative Edward Markey

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Footnotes:

(1) Using QoS controls, streaming video and other content can be selectively limited so that video from site A is available at high bandwidth while video from site B is available at only a fraction of the speed of site A. Obviously, this gives content from site A a tremendous advantage over content from site B.

(2) "Controlling Your Network - A Must for Cable Operators." Cisco White Paper (1999).

(3) A copy of the internal @Home memo detailing this service was posted to the comp.dcom.modems.cable newsgroup on June 8, 1999.

(4) These technologies are also becoming easier to put into place. For example, Cisco's products allow @Home and RoadRunner to update their controls remotely.

(5) "Controlling Your Network - A Must for Cable Operators." Cisco White Paper (1999).

(6) "Cable for a New World: A Cable Provider's Guide to Digital Broadband Development," Cisco Systems.

(7) Cisco's equipment, in particular, has seen wide deployment. Until recently, Cisco was the only CMTS provider certified as DOCSIS compliant - giving their products (which include these QoS controls) immense power vis-à-vis their competitors.