**REMARKS OF MICHAEL J. COPPS**

**FEDERAL COMMUNICATIONS COMMISSIONER**

**"THE BEGINNING OF THE END OF THE INTERNET?**

**DISCRIMINATION, CLOSED NETWORKS, AND THE FUTURE OF CYBERSPACE"**

**NEW AMERICA FOUNDATION**

**WASHINGTON, DC**

**OCTOBER 9, 2003**

Thank you, Michael, for that kind introduction. More than that, thank
you for the creative thinking you and your colleagues here at New
America always manage to impart to the great issues confronting
communications. There are a lot of tangled issues to resolve as we work
to bring the wonders of the digital revolution to each of our fellow
citizens and you bring clarity and creativity to so many of them. So I
appreciate being invited back to the Foundation. The last time we were
together, on Capitol Hill, we were discussing the critically important
issue of media concentration. At that time, we focused on action the
Commission was taking against openness, access and competition in the
media. Today, the New America Foundation, always on the cutting edge,
has enlisted in the next great battle. The next great battle of the same
continuing struggle.

The same forces are arrayed on this field as on the last one.
Innovators, consumers and competitors once again face an entrenched axis
with growing potential to stymie competition, deny consumers access and
prevent innovations not under their control. But this time the battle is
not over media consolidation. This battle is over the future of the
Internet.

Americans take pride in their Internet. From right to left, Republicans
and Democrats, rural and urban, we view the Internet as a place of
freedom where new technologies and business innovation and competition
flourish. For all our other differences, we point to the Internet as an
example of how things ought to work. What made the Internet such fertile
ground for this success? For openers: freedom, access, and wide
dispersal of power. From its inception, the Internet was designed, as
those present during the course of its creation will tell you, to
prevent government or a corporation or anyone else from controlling it.
It was designed to defeat discrimination against users, ideas and
technologies.

This freedom has always been at the heart of what the Internet community
and its creators celebrate. Anyone can access the Internet, with any
kind of computer, for any type of application, and read or say pretty
much what they want. No one can corner control of the Internet for their
own limited purposes. It sounds good so far, right?

*This Internet may be dying**.*** It may be dying because entrenched
interests are positioning themselves to control the Internet's
choke-points and they are lobbying the FCC to aid and abet them. The
founders' vision of the Internet is being exchanged for a constricted
and distorted view of technology development, entrepreneurship and
consumer preferences. For its part, the Commission has already made
serious regulatory miscalculations that could endanger the freedom and
lifeblood of the Internet sooner rather than later. We seem to be buying
into a warped vision that open networks should be replaced by closed
networks and that traditional user accessibility can be superceded by a
new power to discriminate. Let this vision prevail and the winners will
be entrenched interests with far greater power than they have today to
design and control the Internet of the future. I am not singling out one
specific industry here. I am talking about any company that controls a
choke-point. They may be doing what comes naturally and they may be
doing what they think is right, but the result may well be contrary to
the inherent dynamic of the Internet and to the needs of the American
people. If these interests get their way, the losers will be innovators,
technologists and business users, for openers and \-- more importantly
\-- legions of consumers and citizens who make up the Internet
community.

The life-threatening disease comes, strangely, in a prescription bottle.
Many in industry and government prescribe closing off Internet openness
a cure for telecom's ills. They claim that all they are doing is
"letting the market reign supreme," and "deregulating," deploying the
rhetoric of Libertarianism to serve their agenda. They are fond of
railing against picking winners and losers when they are in fact picking
winners and losers themselves. We've been in this same place in other
major debates at the FCC over the past two years. The details may
differ; the direction is the same. I believe that if the Commission's
present mind-set is fully implemented, we will look back, shake our
heads and wonder whatever happened to that open, dynamic and liberating
Internet that once we knew. "What promise it held," we'll say. If that
happens, history won't forgive us. Nor should it.

A funny thing happened as I was writing these remarks. The Ninth Circuit
Court ruled in the *Brand X* case. And it vacated the Commission's
troubling plan for cable broadband service. But even this important
ruling has limited scope. It does not go, because it could not go,
beyond cable to encompass DSL and any other technology that could act as
a choke-point and give a few people too much control over the Internet.
Some argue that because of the ruling the FCC will not rush forward in
other areas until the issue is resolved in the courts. I have no such
expectation.

Our ill-advised policy impacting the Internet is only one piece of a
tectonic shift across the whole wide range of telecommunications and
media issues at the FCC. From media to telecom to the Internet and
beyond, we appear to be rushing toward breathtaking change in regulatory
policy. The Commission strikes me as on course to replace open networks
with closed systems. It is permitting, even encouraging, competition to
wither in the face of centralization. And it is short-changing its
responsibility to protect the public interest.

Not enough people outside Washington have paid attention to the
momentous decisions already taken. With the exception of media
concentration, wherein the brazenness of what the Commission decided and
the stealth process it used to get there aroused the ire of millions of
Americans, many of these other proceedings remain inside-the-Beltway
games even though they will cause gigantic seismic shocks all across the
country. I don't want that to happen. I don't think most of you do,
either.

Back to the battle at hand. Let me lay out the dangers I see in the
Commission's proposals as they relate to the Internet and then offer
some alternate thinking that I believe would better protect the
vitality, freedom and original vision of the founders.

The Internet has already accomplished so much. It has become an engine
of economic growth. A tool of education. A health provider. An
entertainer. It will change the ways we govern ourselves and grow to be,
I believe, a dynamic force against political oppression in regimes that
are now closed. The power of the Internet resides, as its founders
foresaw, in its decentralization. There is no central headquarters
through which every communication is forced to pass. Millions of
dialogues occur simultaneously. People share news, information and
experiences from anywhere to anywhere because even if they aren't
connected to each other, even if someone tries to interrupt a certain
connection, they can route from open node to open node around the globe
to find one another. It's more than just empowering. It may be the best
and most democratic public forum that has ever existed.

What made it this way? What makes the Internet a place of freedom,
technology development, competition and business innovation? What makes
the Internet a place that Americans, conservatives and liberals alike,
point to as an example of how things ought to work? What regulation,
deregulation, unregulation, whatever, made it so that this dynamic and
open platform developed as it did? And as the Internet enters its
adolescence \-- as it matures from the first hesitant steps of its
dial-up infancy to the exuberance and freedom of broadband \-- how do we
keep it this way?

These questions should be our starting point. The Internet developed
this way in large part because it was allowed to grow without either
governments or monopolies stifling its openness and connectivity. To
understand this fully, you need to start with some history. It wasn't
that long ago that one network \-- AT&T \-- ran the whole show in the
wireline world. AT&T had the power to decide how the network would be
used. When innovators showed up at the door with ideas and new
technologies, they were greeted with what I imagine was a courteous but
quick "go away." For a long time, the FCC fully supported this type of
network, and in fact served as its protector. It was thought that only
through comprehensive control by a single company could the quality,
safety and scale economies of the network be guaranteed. Bigger was
better and uniformity and stability were thought to be worth the price
of some lost opportunities for innovation and consumer benefits. This
was government at its worst.

All of this began to change 35 years ago when an innovator called Carter
Electronics Corporation developed a device that connected mobile
radio-telephone systems to the wireline network. This device, called the
Carterfone, had a cradle into which a regular handset was placed. It
converted voice signals to radio signals without the need for a direct
electrical connection. But the entrenched incumbent was convinced that
allowing this innovative and foreign attachment would bring down its
entire system, because the incumbent did not build it, sell it and
control it.

Despite AT&T's complaints, the Commission changed tack, stood up to the
monopolist and did the right thing. It *required* the company to permit
this new application that attached to the end of the existing network.
Alarms went up that this decision meant the end of network quality and
the end of reliable service as we knew it. Of course, the doomsday
scenarios never came to pass. Just the opposite came to pass. The idea
of having a network that couldn't discriminate against innovators who
wanted to improve it started to break the choke-hold that monopoly had
on the system.

In the years after the Carterfone decision, as we entered the Internet
age, the Commission reaffirmed its policy of openness and competition by
protecting freedom on two layers: the access layer and the architectural
layer. In its Computer Inquiries, another Commission said that common
carriers which own transmission pipes used to access the Internet must
offer those pipes on non-discriminatory terms to independent ISPs, among
others. With these decisions we preserved competition in the information
services market by ensuring that customers could reach independent
providers. Congress then moved to protect the architectural layer. In
the 1996 Act, it said that local telephone companies with choke-point
control of physical infrastructures would have to unbundle their
transmission networks.

Now both of these policies -- protections on the access layer *and* on
the architectural layer -- are under attack at the Commission.

Carterfone and its progeny tell a story of how companies that control
choke-points on the network have a built-in incentive to restrict and
control customer use of that network. But this is also a story about the
positive role the FCC can play to ensure that networks are open for
innovation \-- when we do the right thing. This was government at its
best \-- limited, yes, but effective.

Through such decisions, the foundation for our early experience with the
Internet was laid. We had an open environment where consumer freedom to
use the network would be bounded only by the need to prevent harm to the
network itself. So when dial-up technology came along, the Internet grew
quickly. As dial-up kicked into high gear, e-mail exploded, research on
every conceivable subject appeared with a click of the mouse, learning
opportunities multiplied and streams of new services and products became
available.

That was then. This is now. Today, as the Internet matures from dial-up
to broadband, the FCC is positioning itself to change the rules, maybe
even to call the game. Some important rules are already gone, others are
on the block. If we continue down this path, we will end by undermining
the basic end-to-end principle that made the Internet great. Control
will have been wrested away from Internet users and given back to those
interests that control the bottlenecks, just like AT&T controlled them
not so long ago. Broadband should be another step in the path of
Internet growth. It may fall far short of its transformative potential.

All the signals of where this Commission is heading are there for the
looking. It has already voted to place cable modem services into the
unprotected and porous world of Title I. Then it turned right around and
reached a similar, if tentative, conclusion for wireline DSL providers
-- an interim decision that was set to be made permanent, I believe,
before the end of the year, until the Ninth Circuit intervened this
week. I fervently hope that the Court's decision will put the wireline
classification vote off until we have more clarity on the transmission
issues, but I'm not taking that to the bank yet after reading the
Chairman's quick response to the Ninth Circuit vote in which he strongly
disagreed with the decision and vowed to appeal it. Remember also that
the majority wrote into its cable modem order \-- maybe they saw the
hand-writing on the wall \-- that should the courts overturn them, the
Commission will simply forbear. How's that for *chutzpah*? The direction
of the current Commission can also be seen in the broadband section of
the recent Triennial Review Order where \-- in a huge and hugely
troubling decision \-- fiber is declared the province of the incumbents
rather than the playing field for competition and diversity.

Once again this Commission is out-driving its headlights. We are taking
gigantic leaps down the road of removing core communications services
from the framework that kept the Internet free, open, and
non-discriminatory; substituting our own judgment for that of Congress;
and playing a dangerous game of regulatory musical chairs by moving
technologies and services from one statutory definition to another
without having a clue about the consequences.

Before we move all these chairs, we had better understand the
far-reaching implications of our actions, because I can tell you this:
our actions will have many and serious consequences in addition to
stifling Internet freedom and innovation. These involve such critical
issues as universal service, competition, pricing, consumer protection,
privacy, disability rights, and even homeland security. Here's one
example: law enforcement tells us that this reclassification is raising
concerns about its ability to protect the country from crime and
terrorism. Here's another: the Joint Board on Universal Service recently
reported to the Commission that reclassifying broadband transmission as
a Title I service would mean that universal service could ***never***
support broadband deployment. Think about what that means for an
Internet whose full realization depends upon accessibility to every
home. It's a subject for another speech, but I do believe we need a
national policy dedicated to high speed broadband deployment for every
home and every citizen in this great nation. We're not on that track
today.

Until now the big companies that control the bottlenecks have been
unable to convert their reach into controlling power over the Internet.
But now we face scenarios wherein those with bottleneck control may be
able to discriminate against both users and content providers -- users
and content providers that they don't have commercial relationships
with, don't share the same politics with, or just don't want to offer
access to for any reason at all. From the not so distant shadows of the
past, old attitudes favoring industry consolidation and limited access
are again seeking to reestablish themselves. Free from the dynamic of
competition, a favored few interests may try to set up shop as
gatekeepers of the Internet. The sign will be posted clearly:
"Entrepreneurs Need Not Apply." With the on-ramps to the Internet under
exclusive or at least limited control, we the citizenry could be left
with an Internet of fenced gardens and walled prairies. Fences may make
good neighbors; they do nothing to energize a dynamic Internet.

A *Washington Post* story got me thinking about this recently. Some of
you may recall the scenario it depicted of someone trying to phone in an
order for a down jacket from Land's End, only to be told by the phone
company that the call was being re-directed to L. L. Bean, which had
paid the phone company to be the exclusive purveyor of down jackets to
its customers. It may sound far-fetched but discrimination in less
dramatic guise could soon be legal. Think about what could happen if
your broadband Internet provider could limit or retard your access to,
say, certain news sources or political sites. Or what if your provider
decided that you couldn't make use of new and improved filtering
technology to prevent your children from cruising unprotected through
the more obscene alleys of the Internet because it wasn't their filter?
Or what if it prevented you from using some superior spam-jamming
technology that could eliminate all that clutter from your in-box
because it could block *their* spam? Or what if your broadband Internet
provider decided that it wanted to impose usage restrictions to prevent
the use of Virtual Private Networks by small businesses and
telecommuters? Or streaming video? Guess what? Some of this is already
happening. And I am told there is already a healthy market out there for
so-called "policy-based routers" that allow providers to do all this. Is
this how the end-to-end principle ends?

Let me try to put this issue into its broader context. The proposals
related to the Internet are the third front on the battlefield for
control of our communications future. Across almost the entire
communications landscape, the Commission is allowing networks to be
closed, competition to be undermined and innovation to be stifled. The
other two fronts in this war, in addition to the Internet, are equally
threatening.

On one of those fronts, the battle still rages over the Commission's
decision to allow massive concentration in the media world. On June 2,
we voted to walk away from many of our media concentration safeguards.
At issue in that huge vote was how America's TV, radio, and newspapers
are going to look for many years to come. Who is going to control the
media? How many \-- or, rather, how few \-- companies? For what
purposes? I think I exaggerate not at all to say that the issue is
whether a few large conglomerates will be ceded content control over our
music, entertainment and information; gatekeeper control over the civil
dialogue of our country; and veto power over the majority of what we and
our families watch, hear and read.

As the June 2 vote approached, I saw two divergent paths that the
Commission could travel. Down one path was a reaffirmation of America's
commitment to local control of our media, diversity in news and outlook,
continuing opportunity for competitive entry, rededication to
encouraging local creativity and genius through local media and
independent programming, and understanding that access to the public's
airwaves is vital for our democratic future. This path beckoned us to
update our rules to account for technological and marketplace changes,
yes, but without abandoning core values going to the heart of what the
media mean in our country.

Down the other path was evermore control over media choke-points by
fewer corporate giants. Down this path we surrender awesome powers over
our news, information and entertainment to a handful of large
conglomerates, empowering the latter to tighten the circle of their
control and to deny contrasting news, information and viewpoints the
oxygen of distribution they need in order to breathe. Down this path we
bid farewell to the days of innovative independent programming, farewell
to diversity of viewpoint and outlets, and farewell to preserving
time-honored values of localism, diversity and competition.

A majority at the Commission chose the wrong path. Where are localism,
diversity and competition in a decision that allows Big Media companies
to wield up to three TV stations, eight radio stations, the already
monopolistic newspaper, and potentially the cable system and Internet
access in the larger markets. *Localism? Try* *centralization?
Diversity? Try uniformity. Competition? Try monopoly, oligopoly and
denial of access.* And, shortly, we may bestow similar glad tidings onto
Big Cable. Once upon a time, cable was going to save us from too much
network control of the broadcast media. Today 90 percent of the Top 50
cable channels are controlled by the same corporations that own the TV
networks and the huge cable systems. Then we were told not to worry
because the Internet would be the ultimate protection. We looked at the
top 20 news sites on the Internet. Guess who controls most of them? The
same big companies that provide us with our TV and newspaper news. Some
protection.

The third front is telecom. I see here much of the same mind-set that I
have described regarding both our Internet and media concentration
agenda. While many inside our Beltway world are focused on the outcome
of the Triennial Review decision concerning voice competition in
traditional telephony, the real story \-- and infinitely more important
long-term \-- is how the majority closed up shop on broadband and data
competition. After all, we're headed soon for a world where there is no
exclusive voice service, where all services are data and voice is just
one of many data functions. And we're arranging the field of play so
that real competition won't have a fighting chance. This isn't about new
rules for new wires. It's about no rules for old incumbents. It's about
putting the fiber of the future under the ever-tighter control of a few
major players. No, we won't say it that way, but try to find someone who
can go out and raise capital and compete against those who the market
will declare the victors in the great FCC policy debate. More germanely,
try to find a critical mass of such potential competitors. I believe in
my bones that re-monopolization or oligopolization or duopolization \--
or whatever you want to call closing the circle of control and access
\-- are not the cures for telecom's problems.

I fail to see how innovation, technology development, new business
models and consumer protections can survive, leave alone thrive, in a
world wherein the circle keeps closing. I want to see real competition
in broadband. I want to encourage everyone \-- not just the big
innovators, but entrepreneurs tinkering in their garages and
small-business innovators with great ideas and new business models \--
to come up with the best technology and the most consumer benefits that
the genius of this country can create. I want to focus not just on the
architecture of the Internet, but on the architectures of invention and
innovation and creation and entrepreneurship and access that have fueled
so much of this country's progress in the past and without which the
dynamic and liberating potential of all these new technology tools will
be denied the chance to do what they can do for America. Our broadband
and Internet-centered future must be made to crackle with the myriad
possibilities of digital communications. But first we must expand our
vision and expand our thinking.

These two decisions on media and telecommunications cracked open the
window for me so I could begin to grasp the meaning of this Commission's
votes for closed systems, acceptance of discrimination and support of
entrenched business models. Then I began to realize we were going down
the same road for the Internet. The curtains flew open and light poured
in, but the sunshine brought no happiness -- only despair. It's all part
of the same phenomenon \-- whether it is creative artists who are denied
play time on the media, or competitors who are being phased out of phone
company broadband, or bloggers who could be deprived of their customary
freedom on the Internet.

So, yes, I am worried. I think we really are teetering on a precipice.
We have already inflicted heavy damage on our media and telecom systems.
And we could be on the cusp on inflicting terrible damage on the
Internet. If we embrace closed networks, if we turn a blind eye to
discrimination, if we abandon the end-to-end principle and decide to
empower only a few, we will have inflicted upon one of history's most
dynamic and potentially liberating technologies shackles that make a
mockery of all the good things that might have been.

But the doom-sayer brings more heartening news, too. The good news is
that this battle is not over. It's pretty far advanced, no doubt about
that. But I do believe we can still correct our course. Good policy can
yet prevail.

We have courts stepping into the fray, whether it's the Third Circuit
staying the new media ownership rules or the Ninth Circuit correcting
our rush to broadband transmission reclassification. Congress is
actively involved. Just as encouraging, maybe more so, there are a few
flickering signs that a deeper and better discussion may finally be
starting. Its focus is on the principles of openness. And I can think of
no better jumping-off point for an Internet dialogue than by restating
our commitment to the original principle of openness that made the
Internet great. We are fast moving to a world wherein so much of our
lives will be organized through transactions that have to travel in one
way or another along the digital highways of the Internet. To keep these
roads trafficked with opportunity, innovation and investment, we need a
new principle of nondiscrimination. Those with bottleneck control over
the transmission facilities that are the on-ramps to the Internet should
have to guarantee \-- not a principle, not a best effort, but a
*guarantee* \--that all comers will be treated equally and that they
will not use their power over bottlenecks to discriminate between
different content, users or usage. Recent movement in the direction of
openness by a few in the cable industry, especially, is good and welcome
news; it is not a substitute for a policy that provides such openness
for all to see and understand and possess. Until that happy day when we
have a robust and competitive market for access and where there are no
longer any dangerous bottleneck facilities on a network, the Commission
should be on record that conduits must be accessible, neutral and open
to all comers, just as they are in the dial-up world.

In the dial-up world, there is something akin to consumer sovereignty.
The consumer has jurisdiction over the applications that prevail. And
what power that is! No network owner telling you where to go and what to
do. You run the show. This freedom -- this openness -- has always been
at the heart of what the Internet community and its original innovators
have celebrated. Anyone can access the Internet, with any kind of
computer, for any type of application, and read or say what they want.
No one can corner control of the Internet for their own purposes. Why
shouldn't this principle be guaranteed in the broadband world? And if
some tell us this is going to happen anyway, then why not join together
and declare it a principle for all to understand?

Some would prefer to go down the road of open access. Others argue that
the solution is net neutrality. Some want both. I'm not ready to endorse
either as the exclusive solution. But let me offer a piece of friendly
advice: the first need now is for unity in the face of a real threat to
the Internet. Let's not be distracted or divided by the "how" until we
get agreement on the basic principle. Internet openness and freedom are
threatened whenever someone holds a choke-point that they have a legal
right to squeeze. That choke-point can be too much power over the
infrastructure needed to access the Internet. And it can also be the
power to discriminate over what web sites people visit or what
technologies they use. So we won't resolve the problem by focusing on
one symptom alone and trying to make it go away. We need first to
establish, for all to see and understand, that the goal of our policy
must be to maintain and even enhance openness and freedom on the
Internet and to fight discrimination over ideas, content and
technologies. I like to call it "Clear Rules for Old Values," but
whatever you call it, it should be Job One for all of us interested in
the future of the Net.

So, to close, yes, I am worried that we could be witnessing the
beginning of the end of the Internet as we know it. And that maybe we
will never experience the Internet as it might one day be. "Over the
top," some of you will say. But I worry that too often we just tell
ourselves, "That can't happen," or "If anyone tries that, Congress will
step in." All I know is that picking up the pieces after the fact is
usually more difficult and certainly messier than solving problems
before they reach critical mass. A lot of forces are converging out
there, including not just new technologies that create opportunity but
new technologies that facilitate closure and control. Economic policies
that often seem to favor consolidation are converging with regulatory
policies that eagerly pave the way. These are powerful currents. Our
much vaunted digital migration could end far short of its destination.
My concern is all the greater because I see the same policy approach
informing so many of our decisions across the broad spectrum of
telecommunications and media issues.

I don't come here this afternoon claiming to have all the answers -- nor
even to suggest that I have raised all the questions that need to be
asked. I am here to share my concern that continuing the Commission's
present course will bring a heavy cost that we should not pay, have no
need to pay, and should be doing everything we can to avoid paying.

I am also here to say that we still have a chance to avoid all this. If
we role up our sleeves -- if we work together now -- all of us --
businesses, innovators, technologists, content providers, regulators,
legislators, consumers, citizens all -- we can make sure that our
Internet continues to foster freedom and innovation, and that the
original vision that inspired this liberating technology lives for
another day and for another generation. Time is not our friend. We are
the underdogs and surely this will be a difficult battle to win. But it
is a necessary battle to fight. And victory will reward us all with not
only better communications, but a better America.

Thank you.