FUROR ERUPTS OVER NET NEUTRALITY RULES

Original Story:  USAToday.com

A battle has erupted over the Federal Communications Commission chairman's new proposal for net neutrality rules that would allow content providers to pay for Internet express lanes.

In the first formal step toward reinstating net neutrality, FCC Chairman Tom Wheeler presented a draft of the revised rules to his fellow commissioners Thursday. The rules would prevent Internet service providers from blocking or discriminating against lawful content.

But the proposal allows fast lanes to consumers' homes, the so-called "last mile," that content providers such as Netflix can purchase as long as the same opportunities are available to others on "commercially reasonable" terms. The new rules give the FCC the authority to review such arrangements to ensure that they don't harm consumers and competition.

Critics of the new approach immediately asserted that fast lanes are a form of discrimination that could leave small businesses and entrepreneurs at a disadvantage. The FCC should include specific language to prevent such deals, or ISPs should be classified as public utilities that can be regulated more strictly, they say.

"Net neutrality prevents that overcharge, which gets passed along to consumers and stifles innovation," says Gabe Rottman of the American Civil Liberties Union.

Net neutrality proponents were also concerned that the new rules do not address traffic over the back-end Internet pipes used by content providers to send data to ISPs' front doors.

Netflix caused an industry furor earlier this year when it agreed, albeit reluctantly, to pay Comcast for a more direct connection between its servers and Comcast's network to provide faster delivery. "Where they are headed with this is down the wrong path, as ISPs get explicit legal permission to do deals with Internet companies," says Netflix spokesman Joris Evers.

The FCC's Open Internet rules were enacted in 2010 to ensure that Internet providers do not discriminate against lawful content. Following an industry challenge, a federal appeals court invalidated the rules earlier this year but allowed the FCC to recast them.

Wheeler said his goal is to enact rules similar to the earlier ones that pass muster with the court. The commission will vote on them at the agency's May 15 meeting. If they are approved, public comment will be taken before the rules go into effect, which Wheeler hopes will be by the end of the year.

AOL and Huffington Post Finally Reporting Revenue

Story first appeared on USA Today -

Two years after it acquired the Huffington Post, AOL still faces challenges in courting consumers and advertisers — but it is beginning to show progress.

While scheduling a business lunch in late 2010, Huffington Post co-founder Arianna Huffington and AOL CEO Tim Armstrong each had a question for the other.

Huffington, who was hosting the meal at her home, asked whether there was anything he didn't eat. (The answer: mushrooms.)

Armstrong asked whether he could bring along his chief financial officer. That made the AOL honcho's intentions clear, and he swiftly expressed them when the group gathered.

"Up front, before the first course was served, he said he wanted to buy The Huffington Post," Huffington said in an interview at her New York office this week.

Soon after that meeting — during halftime at Super Bowl XLV in Dallas — the deal was signed. AOL paid $315 million for the site.

Together, the companies would create "a digital destination that delivers unmatched experiences for both consumers and advertisers," Armstrong said when the deal was announced.

Two years after that acquisition, and nearly four years after Armstrong took the helm, AOL still faces challenges in courting consumers and advertisers. But it is finally showing progress.

On Friday, AOL reported its first increase in quarterly revenue in eight years. Revenue rose 4%, to $599 million, in the fourth quarter. Net income, bolstered by a $16.8 million gain from the sale of overseas assets, was $35.7 million, or 41 cents a share. In 2011, AOL earned $22.8 million, or 23 cents a share.

"We have walked through the valley of the turnaround and have gotten to growth," Armstrong said during Friday's earnings call.

Managing an evolution

Created as a Web portal and Internet access provider, AOL today has evolved into an ad-supported technology and media giant.

To achieve its goals, AOL cut costs, while ramping up consumer- and advertiser-friendly content such as video and apps. Ad revenue for the company hit $411 million in the fourth quarter, up 13% from the same period in 2011. Full-year ad revenue was up 2.8% to $1.3 billion.

The Huffington Post acquisition has helped power its growth.

Across AOL's properties, the level of monthly U.S. unique visitors was 110 million in December, up from 107 million in December 2011, but down from the 112 million in December 2010, according to tracker comScore. The Huffington Post's U.S. monthly unique viewership has steadily grown — to 46 million in December from 25 million two years earlier, according to comScore figures provided by Huffington Post.

AOL doesn't break out profit on The Huffington Post or other media divisions, but for the first time on Friday, it disclosed results of a "brand group" category that includes The Huffington Post, AOL.com, TechCrunch, local-news provider Patch and other content-focused assets.

That group's revenue grew 4% to $213 million for the fourth quarter. Adjusted operating income before depreciation and amortization was down 34% to $8.8 million for the quarter. The drop-off was primarily the result of increased investment in editorial staff and sales representatives and higher marketing expenses, AOL said.

Despite its recent revenue growth, AOL still faces hurdles. It lost share in the overall U.S. digital ad market in recent years, according to industry tracker eMarketer. AOL had a 2.5% share of all U.S. digital ad revenue in 2012, down from 2.8% in 2011 and 3.3% in 2010.

U.S. digital ad spending grew 14.9% in the fourth quarter to $10.58 billion, according to eMarketer estimates. Google has the biggest share — with more than 41% of all digital ad revenue in the U.S. Yahoo has the second-biggest share.

A well-known personality

Like other top media executives, Arianna Huffington is a frequent attendee at advertising and technology events. But the Huffington Post Media Group editor-in-chief is well-known outside the industry. She is present at major political outings and featured in society pages. Her Greek accent and outgoing personality are so familiar that she is sometimes impersonated on NBC's Saturday Night Live.

Unlike AOL, which had a "stodgy and old" image in recent years, Huffington and the company she co-founded are more current and cutting edge, says Robert Passikoff, president of brand loyalty consulting firm Brand Keys.

Passikoff likens AOL to "a kid in high school who isn't cool anymore." But by aligning with The Huffington Post, the AOL brand acquires some rub-off hipness. "There is a halo effect," he says.

The Huffington Post brand, as well as sibling unit TechCrunch, also tend to attract more tech-savvy users than the traditional AOL brand, notes Ben Schachter, an analyst at Macquarie Securities.

TechCunch and The Huffington Post help AOL draw consumers who aren't tethered to laptops, but use mobile devices such as tablets and smartphones, and will view alternative ad-supported content such as videos, he says.

Armstrong told USA TODAY that The Huffington Post's strong brand awareness, as well as its focus on innovation, gives Huffington Post "game-changing global potential."

Huffington: 'Best of both worlds'

Asked if she would want to buy her company back, Huffington says that "there is no reason to even contemplate anything like that."

"We have the best of both worlds," she adds. "We are a stand-alone entity within a great parent company that is very supportive of our big dreams."

But for The Huffington Post to keep its relevancy, she says, "it has to keep growing and evolving and engaging readers in new ways."

To that end, Huffington Post is:

• Extending global reach. Last year, The Huffington Post launched six international editions. It's now in the UK, Canada, France, Spain and Italy. Next up are areas in Germany, Africa and Asia. "We're going to go from international to global," says Huffington Post Media Group CEO Jimmy Maymann.

• Adding more videos. Video network Huff Post Live launched in August. It provides 12 hours of content, such as interviews with well-known personalities, on weekdays.

• Going mobile. Last year, The Huffington Post introduced an iPad app for HuffPost Live and an app for an iPad magazine. It also launched a wellness-focused "GPS for the Soul" iPhone app this year.

• Increasing lifestyle content: The site will bolster its coverage of personal topics such as divorce, weddings, books and travel.

Google's ultrafast Internet draws start-ups to K.C.

originally appeared in USA Today from The Associated Press:

Inside a small bungalow on the street separating Kansas City, Kan., from its sister city in Missouri, a small group of entrepreneurs are working on their ideas for the next high-tech start-up, tapping Google Inc.'s new superfast Internet connection that has turned the neighborhood into an unlikely settlement dubbed the "Silicon Prairie."

The home on State Line Road is one of several start-up-friendly locations that have sprouted up in Kansas City in recent months. The catalyst is Google Fiber, the search-engine giant's fiber-optic network being tested in the Kansas City area that advertises speeds of up to a gigabyte per second — a rate that massively exceeds the average Internet speeds at homes hooked up with cable modems.

The advantage here for start-ups is simple: A fast Internet pipe makes it easier to handle large files and eliminates buffering problems that plague online video, live conferencing or other network-intensive tasks. Though the Kansas City location presents challenges for start-ups, including the ability to raise money outside the traditional Silicon Valley venture capital scene, entrepreneurs like Synthia Payne believe it's the place to be right now for up-and-coming tech companies.

Payne is one of those entrepreneurs hoping to launch her start-up dream — an Internet subscription service for musicians who want to collaborate online — on the cheap. She shares the State Line Road house, known as the "Home for Hackers," with other start-ups under a deal that allows them to live rent-free while they develop their business plans.

Google's network was attractive, Payne said, because her business plan "is dependent upon really good, really fast Internet."

"Without this on-ramp here I probably would have found it very difficult to come here," said Payne, who in December moved from Denver to develop CyberJammer.

Residents here were thrilled when Google announced last year that Kansas City, Kan., and neighboring Kansas City, Mo., would be its test bed for Google Fiber. The Mountain View, Calif.-based company spent months and unknown sums installing optical fiber around the area. Google provides the full gigabit service for $70 a month and its own cable-TV like service for another $50. A slower Internet connection is free on a monthly basis after a $300 installation fee.

The first homes were installed with fiber optics in the fall, with more "fiberhoods" planned in stages over the next several months. Kansas City, Mo., and Kansas City, Kan., remain Google's only fiber market, though the company has said it plans additional roll-outs. Many in the tech industry believe Google's move could ultimately force broadband providers to accelerate their networks to compete. Making Internet access faster would give the company more opportunities to attract traffic and sell more advertising — the main way Google makes money.

The "Home for Hackers" and its unique business pitch is the brainchild of local web developer Ben Barreth, whose property was among the first wave of houses to be fiber-wired and is a block away from the Google Fiber offices. "Hackers" who pass Barreth's application process and show a real intention to work on a viable project can live there rent-free for three months. Since starting the home in October after cashing in his Roth IRA and putting a down payment on the $48,000 home, Barreth has gotten applications from nearly 60 people seeking a spot in the home.

"The whole start-up thing in Kansas City is like this huge growing beast," he said. "It's got this crazy momentum."

The house has been full since mid-December with Payne and two others. One of the rooms also is reserved for fiber tourists who want a place for a day or two where they can download anything faster than they could elsewhere.

"The hope is that these start-ups will move their operations to Kansas City and this will really bless Kansas City, bring jobs and taxes and we'll build a really cool tech scene," Barreth said.

A few homes away from the "Home for Hackers" is the headquarters of the Kansas City Startup Village, which was started by local entrepreneur Matthew Marcus and where Mike Farmer, founder of mobile search app Leap2.com, has his offices. Farmer said Google Fiber brought attention to Kansas City's start-up culture, "because it sort of ignites the imagination about what you can do with that sort of bandwidth capability."

"Most every week I meet one or two or three people that are looking to come in from out of town," he said.

Despite the growth, it remains a challenge for startups to raise money from Kansas City, Farmer said. Silicon Valley venture capital groups in particular want startup entrepreneurs to be nearby in California, he said.

"I've had some really incredible conversations with some big name VCs, and their first statement is that when you're in this early stage you have to be here, right next to us," he said. "That is a hurdle."

Andy Kallenbach recently launched FormZapper.com, an online forms management site, and also has offices near the "Home for Hackers." He said Kansas City has no aspirations to be the next Silicon Valley and may never have a "Facebook or a giant consumer-level company that takes over the world."

He said it may also be "better for us" that it's more difficult to raise money in Kansas City.

"The hardest thing about a start-up is execution, OK? A lot of people can go out and raise money and get money for an idea or for some product or they can come up with some awesome presentation. But it doesn't matter if you can't build something that people will use," Kallenbach said. "I think here in Kansas City you have to at some point put your money where your mouth is. You have to 'do.'"

Google Fiber Roll-Out Zips Along in Kansas City

by Peak Positions

Story first reported from USA Today

KANSAS CITY, Mo. – It doesn't take long to figure out Google's pitch for Fiber. The potentially disruptive broadband service that Google is making available to residents in certain Kansas City neighborhoods is all about speed —Usain Bolt fast.

The search giant recently opened the Google Fiber Space store that I visited here to explain the promise of Fiber to the public and show it in action. The main virtue is speeds of up to 1 "gigabit per second" (1,000 megabits per second, or Mbps), a whopping 100 times zippier than the typical Internet. The results of a speed test during my visit: download speeds of 800.54 Mbps and upload speeds of 945.29 Mbps.

It's one thing to look at a number. It's another to put it in perspective. Where it might take you more than 2 minutes to download a high-definition movie on what is considered a fast connection today, and a lot longer on a poky connection, Google Fiber promises to do so in seven seconds. Fetching 100 photos might take three seconds on Fiber vs. close to a minute on a setup today. The blurring and buffering delays you might experience before a Street View on a Google Map materializes or a painting in the Google Art Project comes into focus all but disappear. At the Fiber store, there was no visible lag as Google streamed games off the OnLive streaming platform. And Google says Fiber will be ready to handle televisions based on so-called 4K (4,000-plus pixels) supersharp video tech.

While residents of Kansas City, Kan., have first shot at Fiber — ahead of their Missouri neighbors — there are restrictions that could prevent some people who want it from getting it. Either way, it'll be a slow roll-out for the rest of the country. Google isn't specifying when Fiber comes to a town and city near you. But it's a long-term effort.

Those eligible for Fiber can preregister in person at the Fiber store in Kansas City or at fiber.google.com and must do so by Sept. 9. The $10 to preregister is applied to your service. But to actually get Fiber, you may have to rally your neighbors. Google will start building out the network in a given community only if enough people in that neighborhood sign up. Google established thresholds based on size and density as well as speed and ease of Fiber construction. As the company explains it, houses that are spread out in the suburbs require more time, fiber and labor, and therefore are more difficult to connect than homes in a dense urban environment. There are 204 Fiberhoods (as Google calls them) so far; 64 have qualified. Fiberhoods with the most preregistrations get first dibs on Google starting construction.

Those who get the green light from Google have three plan options. The first provides free monthly Internet for a period of at least seven years, provided you pay a one-time $300 fee (or $25 a month for 12 months) covering the cost of construction. Under that plan, Google promises speeds only on par with today's Internet — up to 5 Mbps download and 1 Mbps upload. There are no data caps, and you can upgrade to superfast Fiber at any time. Google will supply a network box (with up to 4 gigabit ethernet ports, plus Wi-Fi).

If you want to cruise the Internet fast lane, you have to sign up for either a Gigabit Internet plan or Gigabit + TV plan. Under both plans the $300 construction fee is waived. The Gigabit Internet plan costs $70 a month and comes with a network box as well. Plus you get 1 terabyte of cloud storage backup on Google Drive. Optional add-on: a Google Chromebook for $299.

The Gigabit + TV plan delivers 18 local channels, plus more than 100 cable channels, with additional premium channels available for a fee. For now, some key channels are missing, including ESPN, Disney and HBO. You also get a 2 TB box to store up to 500 hours of high-definition television and record up to eight shows at the same time. Google is also throwing in its Nexus 7 tablet, which can double as a remote control and search vehicle for the TV.

At the very least, what Google is promising with Fiber should force broadband rivals to step up their game. Time Warner Cable is confident, says spokesman Justin Venech. "Kansas City has been a highly competitive market for some time now, and we take all competitors seriously."

The bottom line:

fiber.google.com

$300 construction fee for free plan (for at least seven years). Construction fee is waived for Gigabit Internet and Gigabit TV plans that are $70 and $120 month, respectively.

•Pro. Gigabit service is blazing fast and affordable. Option for free Internet (at slower speed) for seven years.

•Con. Only available in Kansas City for foreseeable future. Even there, folks who want it may not be able to get it. "Free" plan requires one-time $300 construction fee. Google TV lacks certain popular channels for now.


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Berlusconi Moves to Impose Internet Regulations

AP

Silvio Berlusconi is moving to extend his grip on Italy's media to the freewheeling Internet world of Google and YouTube.

Going beyond other European countries, the premier's government has drafted a decree that would mandate the vetting of videos for pornographic or violent content uploaded by users onto such sites as YouTube, owned by Google, and the France-based Dailymotion, as well as blogs and online newsmedia.

Google, press freedom watchdogs and telecom providers are among those pressing for changes in the draft to prevent the fast-track legislation from taking effect as early as Feb. 4. They say the decree would erode freedom of expression and mandate the technically burdensome - maybe even impossible - task of monitoring what individuals put on the Internet.

Reporters Without Borders Media says the measures could force Web sites to obtain licenses to operate in Italy.

The 34-page decree mandates vetting of any content harmful to minors, specifically pornography or excessive violence, and would require telecoms providers to shut down any Internet site not in compliance, or face fines ranging from euro150 to euro150,000 ($210 to $210,960).

The draft says it would be handled by "an authority," without elaborating, raising questions about among media freedom advocates about how it could be implemented.

Reporters Without Borders said in a statement this week that the draft proposal as written "pose yet another threat to freedom of expression in Italy."

The draft was written in mid-December, just around the same time the media empire founded by Berlusconi announced it was seeking at least euro500 million (US$779 million) in damages against YouTube and Google for allegedly misusing video it produced. The move is in response to a 2007 European Union directive to set up media rules, but only Italy has taken the directive to mean putting Internet companies in the hotseat.

The decree also inherently challenges the YouTube business model, shared by other hosting platforms, of allowing users to upload video without being controlled - the principle at the center of the Milan trial of four Google executives charged with defamation and violating privacy for allowing a video to be posted online showing an autistic youth being abused. Google says it removed the video as quickly as it could. A verdict is expected in the coming weeks, with the executives facing possible jail sentences.

The decree could also provide a tool to swiftly deal with hate groups, like those praising Berlusconi's attacker that mushroomed on Facebook after Berlusconi was struck by a man wielding a statue of Milan's cathedral.

Carlo Carnevale Maffe, an Internet economist at Milan's Bocconi University, argues that Internet must be regulated like other economic platforms or big companies will retain a monopolistic grip and keep getting bigger and more powerful.

"I cannot consider YouTube as a benefactor of mankind. I must consider YouTube as a company," Maffe said. "Google and the Internet live without regulation worldwide. This is impossible and we need to clear what are the limits of this new platform. We need to upgrade the legal platform to make sure the Internet is not blocked from innovation, but to give fair competition to the Internet."

Google's concern is that the decree takes aim at user-generated content, which drives YouTube seo,  that is by its nature not managed in the same way as TV network content is. That was not the intention, Google argues, of the EU directive that Italy has taken to include Internet controls.

"If I am the BBC and I am using the web to broadcast my IPTV (Internet protocol TV), I am in the scope of the directive. If I am a user posting on YouTube a video of my son's birthday, I am not under the scope of the directive," Marco Pancini, European senior policy counsel of Google Italia, said in an interview Friday before testifying on the decree before an Italian parliamentary committee.

Pancini was quoted earlier this week as telling Italian media that it would "destroy the Internet," but he said Friday that after meeting with drafters this week that he was convinced they were open to amending the decree.

Pancini was testifying along with the Italian associations for Internet and telecommunication providers as well as the national press and music federations. Pancini said he expected parliament to return the draft with changes next week, delaying implementation.

China Continues Web Crackdown

The Wall Street Journal

The Internet has made it easier for dissidents, but Beijing now proposes to block access to Web sites not registered and approved by the government.

In 1968, Nicolae Ceausescu made it a crime punishable by death for anyone in Romania to own a typewriter without registering it. When anonymous letters criticizing the dictator were intercepted on their way to Radio Free Europe, Ceausescu ordered up handwriting samples from every Romanian so that handwriting experts could look for the culprits. Ceausescu managed to control the country until 1989, when communism collapsed in Eastern Europe and he was summarily tried and executed.

Authoritarian governments now have to do a lot more than register typewriters and monitor the mail. So much more that it's tempting to assume that just because digital technologies do so much to enable free speech, that they must also ensure free speech.

China is doing its best to remind us that technology can also be a tool of suppression, with Beijing recommitting to censoring its large corner of the Internet. Last summer, the authorities required computer makers to install "Green Dam" software on every PC sold in China, which would block troubling political and religious sites. The regulation was put on hold. But last week a Santa Barbara-based company called Cybersitter sued China and several computer makers for $2.2 billion for allegedly stealing code from its parental-control software aimed at blocking pornography.

The lawsuit—which faces an uphill climb because of difficulties in fighting global copyright violations—says makers of the Green Dam software lifted 3,000 lines of code from Cybersitter (even including some of its customer updates) and incorporated them into the Chinese software. Violations of rights to software in China are usually on display as close as the nearest side street, but it's telling that the government would go to such lengths.

Cybersitter alleges there were several thousand attempts from China to hack into its servers, some with thousands of attempts at access per session, including one traced back to a government ministry. Spoofed emails originating in China purported to come from Cybersitter staff and attempted to install Trojan code to lift information from the company's servers.

Even without the Green Dam censorship, China manages to block full Web access. Last Monday, Internet users in China were surprised when they could access banned sites such as Facebook, Twitter and YouTube. But after a few hours, what's called the "Great Firewall" was back up, with error messages again replacing access to banned sites. The gap in the wall might have been from routine maintenance, but is a reminder that maintaining control over 300 million Chinese Web users requires vigilance.

China makes no secret of its commitment to censorship. Its minister of public security last month wrote an essay on the importance of control in a Communist Party magazine called Quishi ("Seeking Truth"). Meng Jianzhu said that the country needed to do a better job limiting use of the Web and social media to organize anticorruption and other protests, which now officially number 80,000 a year.

"The Internet has become an important means for anti-China forces to engage in infiltration and sabotage," he wrote, urging policies that "give greater prominence to correct guidance of Internet opinion."

Also last month, the Ministry of Industry and Information Technology issued a regulation that all Web sites must register with the Chinese government. If these rules are carried out, the result will be "whitelisting"—only registered sites will be accessible. Or as China-watcher Gordon Chang commented in Forbes, "Once the regulation is fully implemented, China will no longer have an Internet, it will downgrade to an intranet." Only some fraction of the world's Web sites, those that register and are approved, would be available.

China's best-known dissident, Liu Xiaobo, agrees with Chinese officials about the importance of the Web. Last month he was sentenced to 11 years in prison for subversion arising from his role in organizing a signature campaign for a manifesto called "Charter 08," modeled on the Czechoslovak Charter 77. It called for free expression, human rights and the rule of law. Since Mr. Liu's detention at the end of 2008, more than 10,000 people in China have signed it, including online.

In a blog post before his detention, Mr. Liu recalled how hard it was before the Web to organize such efforts. He said that when he circulated such letters in 1989, the most time-consuming part was collecting signatures. "Since the government was monitoring the telephones of sensitive people, we had to ride our bicycles in all directions of Beijing."

Dissidents have it easier in the digital era. As Mr. Liu put it in the blog post, "The Internet is God's present to China."

But the Internet won't now free Mr. Liu from jail, just as Twitter posts couldn't protect protesters in Iran demanding a decent government. That will require action beyond communication. Meanwhile, censoring the Web is hard for any government. But as China is showing, with enough commitment it can be done.

FCC Considering New Rules For Internet Access

Wall Street Journal

WASHINGTON -- Federal regulators are considering whether the government should take greater control of the Internet and ask consumers to pay higher phone charges in order to provide all Americans with cheaper access to broadband Internet service.

The Federal Communications Commission Wednesday will lay out the case for expanding broadband Internet service, outlining current obstacles to making it widely available. The agency is considering whether to force Internet providers to share their networks with rivals and raise fees charged on consumer phone bills to pay for the broader access.

The proposals, which have sparked criticism from telecommunications and cable companies, represent a reversal from the Bush Administration, when regulators cut back on government control of Internet and telephone service.

The new commission, controlled by Democrats, is considering whether more government control is needed to ensure competition and more affordable Internet service.

The FCC staff will float possible solutions in December and make formal recommendations in February, when it is set to release its National Broadband Plan, a blueprint for improving broadband speed and access. Congress asked the FCC for the plan earlier this year.

FCC officials estimate it could cost anywhere from $20 billion to $350 billion to connect all American households to high-speed Internet service, depending on speed offered.

They haven't yet said how much of that investment might come from taxpayers.

The agency is looking at three politically charged proposals to reach its goal of universal broadband access.

One is to as much as double a $7 billion federal phone-subsidy fund, called the Universal Service Fund, which subsidizes phone service in rural areas for low income Americans, and expand it to subsidize construction and operation of broadband networks in rural areas. Money for this fund comes from a small charge tacked on to consumer phone bills.

Previous efforts to overhaul the fund have run into significant resistance in Congress, particularly among congressman and senators who represent rural areas where phone cooperatives and small phone companies don't want to lose the federal subsidies they get to provide service.

FCC staff also are studying whether to revive "open access" rules, which would require Internet providers to lease their networks to rivals at government-regulated rates.

Similar rules are in place in Europe and some Asian countries -- and some consumer advocates say open access is one reason why Internet service is cheaper and faster in those countries.

FCC officials have made no decisions yet on whether to adopt any of these proposals. The five-member FCC board will be the final say and they haven't been presented with any options yet.

Still, large phone and cable companies are against any effort to allow open access, arguing they will have little incentive to invest billions in networks if they are required to offer below-rate access to rivals.

In recent weeks, they have resisted efforts by the FCC's staff to gather data for pricing models. They are concerned the data-gathering might be used to help justify government rate setting, according to industry executives. FCC officials say they wanted the data for different purposes.

Consumer groups say open-access rules will spark competition and lead to more choice and lower Internet prices.

"It provides a way to bring more competition into the broadband marketplace which could drive down prices for consumers," said Joel Kelsey, policy analyst at Consumers Union, publisher of Consumer Reports.

The issue bubbled up last month, when Harvard University's Berkman Center for Internet & Society released an FCC-commissioned study which concluded that other countries have faster and cheaper Internet access because of open-access rules.

On Monday, AT&T told the FCC that the Harvard study's conclusion, "that open access is the talisman for success in broadband, is nothing short of astonishing."

The Harvard study "seems to assume throughout that we should apply the lessons of the past to the future," wrote Link Hoewing, a Verizon assistant vice president for Internet issues, on the company's policy blog. He argued it didn't make sense for the FCC to look at applying old rules, which were designed for the traditional phone system, to the fast-evolving Internet. Verizon declined to comment.

The National Cable & Telecommunications Association said the FCC shouldn't reach a "false and foregone conclusion" that such rules would increase the availability of high-speed Internet service "when a clear preponderance of empirical evidence reaches the polar opposite conclusion."

The FCC's third option for broadening Internet access, floated last month, has already stirred controversy.

The agency suggested that it might reclaim some airwaves from TV station owners and auction them off to wireless companies for more high-speed wireless Internet services.

Broadcasters, including PBS executives and station owners from Texas and other states, have been up in arms, streaming into the FCC over the past two weeks to lobby against the plan.

"The political realities of this are huge," said Gordon Smith, a former Senator from Oregon who recently became head of the National Association of Broadcasters on Tuesday. The FCC's proposal has "a long way to go," he predicted.

Phone and cable companies are already concerned by a separate FCCinitiativewhich would prevent Internet providers from favoring some Internet traffic. These net-neutrality proposals are opposed by Internet service providers, who argue that they need flexibility to manage their networks and potentially offer premium services to customers willing to pay more for faster delivery.

The FCC hasn't formally proposed any open-access rules, which require companies to lease space on their networks to competitors, and may decide not to do so. "We're looking at lots of things in the entire ecosystem. It would be premature to suggest we're moving in a particular direction," said Blair Levin, a former telecom analyst who's overseeing development of the National Broadband Plan for the FCC.

He said that the Universal Service Fund, which is financed by fees charged on consumer phone bills, is flawed because it only covers phone service and not broadband as well.

If the agency heads down the open-access road, it would be returning to policies the FCC adopted in the wake of the 1996 Telecommunications Act, which opened the local and long distance phone markets to more competition.

Congress required phone companies to lease part of their networks to competitors, but it took the FCC the better part of a decade to write rules that withstood legal challenges from the telephone companies. The FCC exempted broadband lines from such regulation in 2002.

China Accuses Google Of Lewd Behavior
Beijing Continues Its Fight Against The Public Square In Cyberspace
Story from Mercury News

Damming the Web: Days before a deadline abruptly imposed by China, computer makers are scrambling to comply with an order to supply Web-filtering software with PCs amid concerns about what it might do to their reputations.

Hewlett-Packard, Dell and Taiwan's Acer — the top three global producers — are asking regulators for details of the order that takes effect July 1 to provide Green Dam Youth Escort software with every laptop and desktop PC sold in China.

The conflict comes as Beijing launched new criticisms this week against search giant Google, which a foreign ministry spokesman accused Thursday of spreading pornography. Chinese users were unable to connect to Google's main site or its China-based service, google.cn, from late Wednesday into today. But spokesman Qin Gang, speaking at a regular briefing, sidestepped questions about whether the government was blocking access.

Government regulators say Green Dam must be supplied with every computer to prevent children from surfing the Internet for pornography. But technical analyses of the software — developed by a previously unknown Chinese company — have shown embedded programs to filter out content the government deems politically objectionable.