TECHNOLOGY

Toward a Two-Tiered Internet

The Internet is one of history's most democratic forms of communication. In 1999, John Chambers, President and CEO of networking giant Cisco, called the Internet the great "equalizer between people, companies, and countries." But recent efforts by AOL and Yahoo to create a tiered Internet would tilt the system's level playing field in favor of large wealthy companies. The two e-mail providers have partnered with Goodmail Systems to "charge companies about 1/4 cent to send a message that will bypass spam filters." E-mails from paying companies will go straight to a user's inbox, but e-mails from non-paying companies will go through the "gauntlet of spam filters that could divert them to a junk-mail folder or strip them of images and Web links," even if they're not spam. AOL and Yahoo argue that this measure -- set to go into effect for AOL in 30 days -- will help reduce spam for users. But the reality is that this virtual express toll lane will increase profits for the providers, while stifling innovation and leaving behind small businesses and nonprofits that are unable to afford the extra cost. "This would literally be the end of the Internet," says Stanford law professor Lawrence Lessig, who "fears that the next Google won't ever get the chance to establish itself -- because it would be stuck in the slow lane." Take action now and let AOL know that you want the Internet to stay open.

NEW FEE WILL NOT REDUCE SPAM: AOL and Yahoo argue that this new "postage" measure will restore order to a spam-plagued system. Senders paying the certified fee "must promise to contact only people who have agreed to receive their messages, or risk being blocked entirely." But as Timothy Karr of Free Press points out, Goodmail's scheme will not eliminate spam, but actually increase it: "AOL subscribers will receive certified email in addition to the regular traffic that clutters most inboxes." Additionally, AOL admits that spam isn't as troublesome as it once was. AOL users' spam complaints are down 75 percent from 2003, yet its sophisticated spam filters capture about 20 percent of legitimate mail. Gizmodo reports that "new systems for spam-resistant email have been in the cards for years," but no one can come to any agreement. In the meantime, e-mail providers shouldn't close the free Internet as a quick solution, because as prominent anti-spammer Richard Cox of Spamhaus notes, "[A]n e-mail charge will destroy the spirit of the Internet."

A SYSTEM OF HAVES AND HAVE NOTS: Goodmail, AOL, and Yahoo will all fare well economically from this deal. Goodmail will charge 1/4 cent to 1 cent per e-mail, "with high-volume mailers getting the biggest discounts" and nonprofits also receiving discounts. Goodmail will pass on more than half of that amount to the e-mail provider. But not only will companies be hit hard for each e-mail they send, "the Goodmail technology will also be costly for senders to setup and use." MoveOn.org says that if an e-mail fee existed years ago, the advocacy group "would never would have gotten off the ground." Matt Blumberg, the chief executive of Return Path, a competitor of Goodmail, notes that Goodmail's price is unnecessarily expensive: "[I]t's bad for the industry and bad for consumers. A lot of e-mailers won't be able to afford it." Small businesses, unlikely to receive any type of discount, will be hit the hardest. "The Internet is the great equalizer for small businesses because they can partake in enterprise marketing activities on a smaller scale. Imposing a per-message fee will create a competitive advantage to companies that can afford to pay the fee."

FIGHTING FOR NET NEUTRALITY: A coalition of 50 groups with about 15 million members has formed against the Goodmail scheme, calling it the "first step down a slippery slope that will harm the Internet itself." The group -- including strange bedfellows such as the Gun Owners of America, RightMarch.com, Defenders of Wildlife, and the Center for American Progress Action Fund -- represents four million of AOL's 19.5 million customers. The Gun Owners have threatened that its members will leave AOL if the new fee materializes. A recent poll conducted by the Consumer Federation of America, Consumers Union, and Free Press found that "70 percent [of responders] were concerned about providers blocking or impairing their access to Internet services or sites" and 54 percent wanted Congress to write legislation preserving net neutrality. Large technology companies, such as Google, are also fighting against a tiered Internet. "New innovation in the marketplace increases our business," says Google's Vint Cerf, one of the Internet's creators. If start-ups can't go fast, he says, the Internet will be a "zero-sum game."

ANOTHER TOLL LANE: Broadband providers, such as AT&T, BellSouth, and Verizon, are also looking for ways to make money by destroying net neutrality. Internet sites willing to pay high fees would be given preferential treatment on web, resulting in faster load times for users. "High-bandwidth sites that refused to pay, however, could see their traffic slowed to a crawl, or even blocked in some cases." Telecom firms argue that they have the right to be compensated for building networks. John Thorne, Verizon's senior vice president and deputy general counsel, told a conference that Google shouldn't be enjoying "a free lunch." But Ben Scott at Free Press argues that if the broadband providers get their way, "The next great idea, the next Google or eBay or Napster or whatever, won't have the capital to get themselves in the fast lanes right away. ... The reason the big e-companies were so successful were that they started on the same level playing field as everyone else."

CONGRESSIONAL ACTION: Today the Senate takes up the issue of net neutrality. Sen. Ron Wyden (D-OR) will be introducing legislation, the Internet Non-Discrimination Act of 2006, calling for a "toll-free" Internet and prohibiting "Internet network operators from charging companies for faster delivery of their content to consumers or favoring some content providers over others." Wyden said that his legislation "will make sure all information (transmitted over broadband networks) is made available on the same terms so that no bit is better than another one."

Under the Radar

KATRINA -- CAUGHT ON TAPE: BUSH UNCONCERNED ABOUT HURRICANE'S WARNINGS: A videotape obtained by the Associated Press captures President Bush's reaction to dire warnings that Hurricane Katrina would cause catastrophic damage. One day before Hurricane Katrina made landfall, Bush was briefed about the possibility that Katrina could "breach levees, risk lives in the New Orleans Superdome and overwhelm rescuers," and it was all captured on tape. In response to the warnings, "Bush did not ask a single question during the briefing but assured soon-to-be-battered state officials: 'We are fully prepared.'" The new video disputes Bush's claim a few days after Katrina hit that "I don't think anybody anticipated the breach of the levees." The White House responded to the new evidence by saying, "I hope people don't draw conclusions from the president getting a single briefing." In fact, the videotape simply confirms previous evidence that Bush knew of the serious nature of the storm and failed to take action.

IRAN -- NEW 'OFFICE OF IRANIAN AFFAIRS' OUTLINED IN STATE DEPARTMENT CABLE: The Bush administration this month "quietly orchestrated a major shift in U.S. policy toward Iran," requesting $85 million for a plan "not just to contain Tehran’s nuclear ambitions but also to topple the Iranian government." An unclassified State Department cable released yesterday offers details on this new strategy. (The Progress Report has acquired a copy of the document, which you can read here.) The cable announces a new Office of Iranian Affairs, and serves as a global casting call for Iran and Persian language experts. It states that the U.S. is establishing positions in the United Arab Emirates and developing "reporting" positions in countries with large Iranian exile communities, including Germany, Great Britain, and Azerbaijan, among others (a strategy also used prior to the war in Iraq). In related news, the president of the conservative Hudson Institute has published a commentary urging the Bush administration to use "an American military strike to knock out Iran's uranium processing capacity." "Will Bush do it?" Herb London asks. "He cannot afford not to do it." Numerous U.S. military analysts and Iran experts have said there are no good military options to the Iran nuclear impasse.

BUDGET -- TREASURY REPORT PAINTS BLEAKER FINANCIAL PICTURE: CongressDaily reported today, "A little-noticed Treasury Department report sent to congressional leaders in December paints a bleaker picture of the nation's finances than is widely accepted and is beginning to attract attention as lawmakers prepare for election-year budget battles." The report puts the fiscal year 2005 deficit at $760 billion by "using generally accepted accounting principles that private businesses must use to present their finances." The larger figure contrasts strongly with the $319 billion figure typically cited. According to the report, standard deficit calculations give "a potentially unrealistic and misleading picture of the federal government’s overall performance, financial condition, and future fiscal outlook." Rep. Jim Cooper (D-TN) complained that Congress was not sufficiently notified about the report. "We got more notification on the NSA domestic surveillance thing," Cooper said.