It should hardly come as a surprise to anyone — but nevertheless a survey conducted by International Data Corporation on behalf of Zeugma Systems, a company that makes an edge router for broadband networks, shows that consumers simply hate bandwidth caps and will likely switch to another carrier if they have the option. The survey polled 787 U.S. consumers. Here are some key findings of the survey:

• 81 percent do not like the idea of establishing a bandwidth cap and charging for use above the cap.
• 51 percent would try to change service providers if their BSP imposed bandwidth caps.
• 83 percent say that do not know what a gigabyte or have no idea how many gigabytes they use.
• Even light users are opposed to the whole idea of bandwidth capping.
• Only 5 percent said unequivocally that “those who use more should pay more.”

This data is pretty close to the findings of a poll conducted by us earlier this year. Ninety-one percent of 1,159 voters said that they would switch to another ISP, while 6 percent said they would not switch. Comcast is the biggest proponent of metered broadband, with Time Warner being a close second.

In light of this data, AT&T and Verizon (and Best Buy) should make it a point to emphasize that it is cable companies and not they who are capping bandwidth and get people to switch. Maybe that would be the kind of spanking that would bring cable companies to their senses. That said, the larger issue is that the FCC and our government have helped create a broadband duopoly that has almost always worked against the consumers. We need to fix that issue before we can address anything else.

Back to the survey: about 95 percent of those surveyed said that they would happily pay for more premium bandwidth services if they can get it for services such as video, VoIP, gaming and telecommuter VPNs. Around 54 percent would switch service providers if a competitive service offered a premium tier, while another 26 percent said they would pay their service provider an additional fee for premium bandwidth services.

Take that last paragraph with a pinch of salt: this dovetails nicely with the kind of traffic management gear Zeugma is trying to sell to the carriers.

With its appeal of an FCC enforcement order, Comcast is showing how a bunch of highly trained lawyers can overturn the spirit of the law with a focus on definitions and legalese. It’s a battle played out in procedural dramas in prime time, but in those shows the spirit of the law generally wins. The outcome of this real-life situation — in which the FCC chastised Comcast for throttling P2P traffic without telling users — is far less certain.

But first, like in any courtroom drama, there are a lot of procedures to get through. First, since other groups are appealing the FCC order in three different circuit courts around the country (mostly for letting Comcast off too lightly), the courts will hold a lottery to determine which circuit court gets to hear a consolidated appeal. Then that court will set up a pleading schedule and the parties will make their arguments. Getting to the arguments could take months.

Judging by its previous filings with the FCC, Comcast will likely argue two main things: One, that the whole process was invalid because the terms of the complaint shifted midway through the proceeding; and two, that if the FCC wants to implement and enforce some sort of “reasonable network management practice,” it needs to do so with a formal rule-making process.

In those earlier filings with the FCC, Comcast argued that the Free Press, which originally filed a complaint against the ISP last fall, asked the commission to investigate Comcast based on a previous FCC policy statement. The FCC started the investigation, but later in the game the Free Press changed its terms, prompting the FCC to investigate Comcast under a section of the Communications Act. The Free Press says it was using shorthand in its first filing, but when it comes to lawyers, shorthand is no excuse. Anyhow, Comcast argues that even if the terms didn’t matter the FCC still overstepped its bounds.

In a later filing, Comcast went to great lengths to explain how the FCC overstepped its bounds. In particular, it said that unless the commission sets up a formal rule-making proceeding (which Comcast is happy to be a part of), the FCC can’t just turn around and admonish Comcast for throttling traffic because at the time, there wasn’t a rule against it.

In the same filing, Comcast belittled the Free Press and anyone silly enough to want some form of FCC rule-making to protect consumers from overzealous network management. Comcast offered a series of slippery slope arguments about how making the FCC judge network management practices would lead to micromanagement by the agency, and fear on the part of ISPs to make investments in their networks if the FCC didn’t like the ISP’s methods. Comcast also argued that, as an Internet provider, it should be free of federal regulation.

As if we’re not already feeling a little sullied by the entire argument — after all, Comcast did throttle P2P traffic while not telling consumers — Comcast thumbed its nose at the proceeding by pointing out that during the two financial quarters that the FCC investigation took place (along with all the negative publicity), Comcast added nearly 1 million high-speed Internet customers. Sometimes the market doesn’t give a damn about the spirit of the law.

For any of us who recognize that personal privacy on the web is an illusion, the response to a Congressional inquiry asking how various ISPs and online portals target advertising and collect data will come as no surprise. Aside from the use of deep-packet inspection technology used by ISPs to insert advertising based on surfing habits, Congress discovered cookies and data retention policies. In a shocked tone, the Washington Post reported that Google is using DoubleClick’s tracking cookies to monitor where people go on the web in order to serve ads.

Is this really all that surprising? Wasn’t that one of the reasons Google paid $3.1 billion for DoubleClick? AOL also confessed to using tracking cookies and said relatively few (tens of thousands out of more than 100 million) users opted out of its targeted advertising program. Yahoo said it also uses behavioral ads but noted in its letter that it plans to announce the ability for consumers to opt out of such “customized ads.” It will still track users, though.

Looking beyond the major portals (excluding Microsoft, which hasn’t yet responded), the letters from the companies surveyed by the House Committee on Energy and Commerce turned up a few surprises such as Cable One, CenturyTel and Knowlogy using NebuAd’s deep-packet inspection technology in trials. I also noted that business providers such as Cbeyond, TW Telecom, and even large bandwidth providers Covad and XO Communications don’t use targeted advertising to their customers. Cablevision, Windstream, Comcast and Cox were the rare ISPs who aren’t using any real advertising efforts on their subscribers. Many providers did confess to typo squatting, however.

I’m not impressed by ISPs using invasive measures to track surfing habits to sell advertising, unless users are given some sort of price break and have a choice on whether they can opt-in. To me such tactics are undisclosed and give the consumer few outs if they don’t want to be tracked.

However, for free services, such as Google’s search engine or other web content providers, advertising is their lifeblood, and consumers (and Congress) should expect as much information tracking to take place as the portals can both devise and get away with. In the absence of regulatory protection and any other way of making money, it’s no surprise that advertising has become more invasive. Nothing in life is truly free.

For more on the topic check out these posts:

• Of Course the Government Cares About Your Privacy
• Bob Dykes CEO of NebuAd on DPI
• A Privacy Manifesto for the Web 2.0 Era
• How to Safeguard Your Privacy Online

image courtesy of Congressman Ed Markey

As expected, the Federal Communications Commission has voted to chastise Comcast for its network management practices, with two commissioners of the five dissenting. Unfortunately, the FCC has decided not to make a formal rule regarding network management practices and has instead decided to adjudicate the issue and move forward with Network Neutrality problems on a case-by-case basis.

Comparing the Comcast issue to rural telephone company Madison River Telecommunications blocking voice-over-IP traffic three years ago, FCC Chairman Kevin Martin said by blocking potential competitive video applications, “Comcast did not practice network management; they had arbitrarily picked an application and blocked [consumers'] access to it.”

As such, he gave Comcast until the end of the year to stop its existing network management practices and tell its subscribers more about what the new network management practices might entail. The FCC did not, however, fine Comcast, which said in a statement issued this morning:

“We are gratified that the Commission did not find any conduct by Comcast that justified a fine and that the deadline established in the order is the same self-imposed deadline that we announced four months ago. n the other hand, we are disappointed in the Commission’s divided conclusion because we believe that our network management choices were reasonable, wholly consistent with industry practices and that we did not block access to web sites or online applications, including peer-to-peer services. “

The commissioners also held up the FCC’s efforts in this case as the model for deciding such cases in the future. Such a long-winded and time-consuming process is a laughable way to arbitrate network access issues on the fast-moving Internet. As the commission noted, the investigation began in November 2007 after the Free Press filed a complaint with the FCC about Comcast blocking BitTorrent traffic. After two hearings, more than 6,500 comments and much back and forth, eight months later Comcast gets its comeuppance — a whopping two-hour lecture and a slap on the wrist.

Given how quickly applications and startups can rise and fall on the web, spending eight months to determine an application’s ability to access the web if the ISPs determine to block it means that innovation could be halted.

Under the order approved by the FCC, network management must be reasonable and not discriminatory. Broadband providers should also take greater pains to tell consumers about their network management practices. Commissioner Deborah Taylor Tate (who didn’t sign the order) said, “Consumers must be able to both know and understand what they’re getting and what they are paying for.”

On the other hand, Commissioner Tate also pointed out that making it difficult for ISPs to manage their network makes it difficult for them to halt child pornography and illegal file sharing. Wow, I knew that all P2P users were stealing music, but to be lumped in with child pornographers really is a PR low for file sharers nationwide.

The final dissenter, Chairman Robert McDowell, who parroted the industry line very well, pointed out that this order will slow the Internet to a halt because engineers will no longer be allowed to “discriminate” between packets on their networks without worrying how the FCC might rule against them. He paints a ridiculous picture of email packets, which do not have to be delivered as quickly or in any particular order, being deemed equal to voice or video packets, resulting in “hissing and popping” video on the web.

For such a toothless order, the industry is taking great pains to show how inconvenient increased FCC scrutiny into their management practices will be.

Comcast has been accused of blocking traffic several times in its history and may have even admitted to more than the straight up P2P blocking we all knew about. But late yesterday, Comcast finally got it’s comeuppance. Sort of. Kevin Martin, chairman of the Federal Communications Commission and close personal friend to the cable competitors, the telecom industry, could take no more. 

So this morning he’s circulating an enforcement order that says that Comcast blocked network traffic and that such traffic blocking needs to stop. The enforcement order was prompted by a complaint from the non-profit group, Free Press, and The Commission will vote on the order at an open meeting on Aug. 1. The order would require Comcast to stop blocking traffic, provide the FCC details on how and how often traffic blocking was used and give consumers detailed information on how Comcast plans to manage its network in the future

We actually already know how Comcast plans to manage its network because Comcast CTO Tony Werner told Om how bandwdith hogs would experience slowdowns. In an emailed statement Comcast spokeswoman, Sena Fitzmaurice, denied the traffic blocking.

“The carefully limited measures that Comcast takes to manage traffic on its broadband network are a reasonable part of Comcast’s strategy to ensure a high-quality, reliable Internet experience for all Comcast High-Speed Internet customers and are used by many other ISPs around the world.”

At issue here is the definition of “reasonable network management,” a phrase the FCC introduced in a 2005 policy statement to ensure broadband networks were kept open and accessible to consumers. ISPs could apply “reasonable network management,” to keep traffic flowing, but Fitzmaurice said the the FCC never defined what reasonable network management practices entailed. So perhaps blocking certain forms of traffic counts? My guess is network traffic blocking is like porn. You know it when you see it, and Martin finally chose to see it.