If you’ve been following the issue, nearly nothing about the arguments will be new to you, but as I watched the meeting live today, I was struck by the thoroughness of the arguments both in favor of and against the rules, in particular the polar opposition in the views of Chairman Julius Genachowski and the lengthy, detailed dissent by Republican Commissioner Robert McDowell. With a little help from Scribd and YouTube I’ve embedded some samples of the day’s proceedings below.

First is the prepared statement by Genachowski.

Net Neutrality, Genachowski statement

And here’s the spirited dissent by Commissioner Robert McDowell.

Net Neutrality, McDowell Dissent

Finally, if you you’d rather just watch the proceedings for yourself, here’s a the two-hour-plus session in its entirety. The net neutrality stuff begins at about the 30-minute mark, following other business. The statements by the various commissioners begin at the following time marks:
Copps: ~49 minutes
McDowell: ~1:09
Clyburn: ~1:35
Atwell Baker: ~1:42
Genachowski: ~2:02

When Sprint CEO Dan Hesse joined the company three years ago, the third-largest carrier was bleeding subscribers from having a poor reputation for customer service and facing stiff competition from the likes of AT&T, which holds the exclusive on the iPhone.

Since then, Sprint has stemmed the losses, mostly by beefing up its customer service and by investing in the prepaid sector to attract a wider audience during the economic downturn. Going forward, Sprint looks to its 4G strategy for growth through its ownership stake in WiMax-provider Clearwire. Next up, Hesse joins Walt Mossberg onstage.

3:45 pm: Walt welcomes Dan Hesse to the stage. You can’t have mobile without networks, says Walt. You’ve led the way on 4G; tell us about it.

3:46 pm: Dan: We are getting San Francisco up soon, and will have 120 million POPs by the end of the year, or about a third of the country.

He explains what 4G is: 3G for was email and Web pages, but 4G is for multimedia and video.

The best analogy is that 4G is the wide open freeway vs. an interstate that provides the same speeds, but you have to stop along the way.

3:48 pm: Walt: Why are you using WiMax when the two other carriers are using LTE?

Hesse: Back in 2008, we wanted to be first, and WiMax was available right now. (Lots to do with TDD, and other technical mumbo jumbo). Technically, there’s no difference. I can’t deny that LTE will be a bigger ecosystem, but we couldn’t wait. We thought the market was ready.

With the success of the iPhone, we thought it was ready now.

Walt: How much leadership did it give you?

Hesse: Well, it made Verizon move a lot faster….In 2010, we’ll have 120 million POPs, and the EVO and Epic (two 4G phones) have been really successful.

Walt: How successful?

Hesse: If you were to go to Clearwire’s wholesale numbers, you should think of Sprint’s lion’s share of the wholesale numbers.

Walt: Was it worth the investment?

Hesse: I think so.

3:53 pm: Hesse: 4G is one element of many.

Walt: You like Consumer Reports, unlike the guy here earlier [AT&T's Glenn Lurie].

Hesse: Sprint is the fastest growing brand of postpaid in the U.S.–not the Nextel brand, where we’ve been losing subscribers.

3:55 pm: Walt: Are you going to get the iPhone?

Hesse: Can’t say.

Walt: Would you like the iPhone?

Hesse: Under the right conditions, yes, I would. It’s a wonderful phone.

3:56 pm: Backing up a bit, Walt now asks about an industry trend toward tiered pricing for data plans, where the more you use, the more you pay.

Sprint hasn’t yet limited users’ traffic.

Hesse: Customers will pay a premium for simplicity. Even if it’s not in their best economic interest, they will go with the unlimited plan. We were the first to come out with truly unlimited text, voice and data with the Simply Everything plan.

3:59 pm: Walt: Are you not going to do tiered pricing?

Hesse: So far, we aren’t, he says, which gets a round of applause from the audience. But Sprint did up the cost of the unlimited plans of the most capable devices on the network.

4:00 pm: Walt: Unlimited means unlimited or doesn’t it?

Hesse: No, it doesn’t. What if they have the SlingBox streaming 24×7?

4:01 pm: Hesse: The trend is toward one plan for all of your devices, like tablets, phones, PCs, etc.

Walt: Are you going to offer plans for all those devices?

Hesse: We are thinking about it. That’s the next step to simplicity. Three years ago, it was about one device.

4:02 pm: Walt: People aren’t counting minutes, now they are counting megabytes and things people don’t understand.

Hesse: Something has to give; what’s going to be the form? Do you have meters, do you have tiers, do you increase the price of the unlimited plans?

Another option is to have a lot more spectrum available to add capacity at a lower cost.

Walt: Are you talking about taking away the spectrum that the elderly use to watch their TV?

Hesse: If more spectrum is available, you can use more frequencies, which is a lot less expensive than splitting cell sites and putting in more towers.

Walt: There’s some confusion about Clearwire. They are opening stores and selling laptops and modems. You own most of that company, and they are building your WiMax network. Why are they competing with you?

Hesse: I have a wholesale business that resells minutes to Leap, so it’s the same thing.

4:06 pm: Walt’s giving Hesse grief about the structure of the Clearwire deal. Despite Sprint owning roughly 54 percent of the company, Sprint doesn’t control the board.

Walt: Who did that deal?

Hesse: Two thumbs pointing at himself [me]. When you have this many owners of the company, we can’t agree.

4:08 pm: Walt: What’s the value of 4G?

Hesse: The experience is really fast, and we offer unlimited plans on 4G. There’s a five-gigabyte cap on 3G, but 4G is completely unlimited.

Walt’s curious if 4G is really life-changing and transformative. Sprint’s beating the other guys by 2x, not 10x or 20x.

Hesse: My son showed me his speed test on his EVO at home, and it was over 8 mbps, so it depends.

4:11 pm: Questions from the audience. The Seattle Times’ Brier Dudley asks about the potential deal between Clearwire and T-Mobile, which may be falling apart because of Clearwire’s recent $1 billion in debt that it has raised.

Hesse deflects the question despite several reports to the contrary, by saying he didn’t know anything about that.

Another audience question: What’s your stance on network neutrality?

Hesse: The FCC has come out with a proposal, and we are very supportive of it.

The Google and Verizon plan that the New York Times reported on last week is out. And, as Google and Verizon have said, it’s not what the New York Times had reported: A pay-to-play arrangement where Google gets the ability to speed its stuff across the Web by paying a premium.

Instead, it’s a three-tiered policy proposal–and absolutely not a “business arrangement,” the two sides insist–that will both mollify “network neutrality” advocates and worry them.

You can read the full thing here, and see Google and Verizon’s explanation of the policy/plan below. The fast version:

• The Web stays open, everyone gets treated equally–everyone with “legal content,” that is–and Google won’t be paying to move its stuff faster than the competition. It’s what everyone who says they care about network neutrality demands.
• But! Verizon and/or others telcos/cable guys/ISPs want the right to build and/or use “new services.” And those could have different rules.
• And! The open Web policies described above are for “wireline” services–i.e., pipes and cables into your home or office. But wireless broadband is a different animal. And it would have different rules, too.

The second and third points, of course, are where things will get sticky. The Google/Verizon statement is intentionally vague about what these new services would be and who would build them and what would be on them. But in the conference call to explain the statement, reporters immediately began referring to the “new services” as a “private Internet,” and I bet that name will stick.

Google CEO Eric Schmidt, for his part, insists that his company wants no part of the “private Internet” or whatever it is that may or not be built. Google “likes the public Internet,” he said, and later upgraded his affection to “love.” And asked repeatedly whether Google would use any of the new services, he repeatedly said no.

Which makes it appear as if Google has made the following trade: Give us unfettered access to whatever we want on the public Web, and we won’t squawk about secondary services you build on your “private Internet.” Which we’re not calling the “private Internet” and we’re not going to use anyway. And when it comes to mobile, well, that’s a different discussion.

There was very little discussion in the press Q&A about wireless, which is odd, given the amount of time my colleagues (and our readers) spend obsessing about the iPhone and Android and the BlackBerry, etc., etc. But surely we’ll hear more soon enough.

Meantime, what about the thing-that-doesn’t-exist-and-is-not-a-private-Internet? What are you supposed to do with it anyway? Especially, since, according to Schmidt, you won’t be using it for Google search or to watch YouTube clips?

The policy statement offers some suggestions: “Health care monitoring, the smart grid, advanced educational services, or new entertainment and gaming options.” Okay, but aren’t all of those things best used on the Web–the “open Web,” that is–anyway?

And here Seidenberg is quite vague. On two separate occasions, he suggested that the “private Internet” might be a good place to stream 3-D video. But surely he’s thinking about uses beyond “Pirhana 3D.”

But for better or worse, all of this is going to get thoroughly vetted in Washington, so I’m sure we’ll hear more about in the future. For now, enjoy your open Internet!

Earlier:

Google and Verizon are about to conduct a joint press conference, presumably to explain what the two companies are and aren’t doing with regard to network neutrality.

Last week, the New York Times reported that the two companies were working to push forward legislation that would allow Internet service providers to prioritize certain traffic on their wireless networks. Verizon and Google, in unusually loud proclamations, said the Times got the story wrong; the Times said it was sticking by its story.

Verizon and Google both plan to publish statements on their public policy blogs at 1:25 pm Eastern, and the call with Google CEO Eric Schmidt and Verizon CEO Ivan Seidenberg is scheduled for 1:30. I’ll cover it live here:

Live Blog

1:28 pm: Waiting on the promised policy blog posts. Nothing yet. *Unless Google and Verizon are conspiring to keep my computer from getting the information!*

Verizon blog now sputtering, gurgling. Perhaps something’s about to emerge…

Well, if you’re bored, here’s a Tom Petty video.

1:36 pm: No blog statements, but call is starting anyway.

Here’s Schmidt, introducing Seidenberg and their respective public policy chiefs.

Over past years, to Schmidt’s surprise, VZ and GOOG have found “more and more” that they agree w/r/t public policy.

Google needs investment and infrastructure that VZ and telcos provide; he hopes they need Google and others software..

So public policy statement coming.

But first more about Google: Open internet very important to us. Google has has enough money to get whatever it needs on the Web, but next generation of companies will need access to open Internet.

Schmidt: Lots of chatter and reporting about this since last Thursday, “Almost all of which has been completely wrong”, even though we love “sophsticated critcism.” So please read what we have to say before you talk or type.

Here’s the link. Schmidt summarizing but I’m linking. So you’ll have to read for yourself…

Seidenberg finishing up list of talking/policy points that Schmidt started. But trying to paraphrase what he’s saying nearly impossible, since it is laden with legalese and is oblique (intentionally so, I assume). So going to hang tight for a minute.

Seidenberg. “Why now, why Google”? “This debate has been somewhat hijacked by a lot of discussion and issues that are not really reflective of what the company is doing”…
So….”we agree with Google” that proposal is to “follow a consumer-driven orientation”. Ugh. Such non-language.

Q&A

Q on principle six. What does that mean? Would it mean that Google, using Android phone, on a non-public Internet, could buy up capacity to offer YouTube on Fios at a better price or speed?

Seidenberg: I think the answer is “no”. But let’s explain this. “There’s no paid priortization that would come from Google over the Internet, period.” BUT. If google or someone wants to bundle a new service with new features and that was transparent to everybody, that would be permitted.

Schmidt: Right!

Q: But you could have YouTube channel on Fios, right?

Seidenberg: Sure.

Schmidt: We wouldn’t do that. “Google likes the public internet”

Q: Richard Waters from the FT seems to be underwater.

But Seidenberg thinks he can hear him. We couldn’t degrade capacity of public internet in order to build up private capacity. We’ll start out by serving public internt. But if we have additional capacity we’ll build out both.

Q: What’s your incentive for building out public internet.

Seidenberg: “So many ways” to monetize growth.

Schmidt: Verzion and others have incentive to make pubic internet more useful, “simply because it’s what their customers want”. And there’s enough excess supply to build both. And we’ll make sure that they follow up on these promises.

Q: And to be clear – Google, including YouTube, will always be on public internet?

Schmidt: Yes.

Q: Someone from Reuters, speaking very quietly.

Schmidt: “There is no business arrangement.” btw us and Verizon. Want to be very clear that those reports (in the Times) were “false, misleading and incorrect”.

Seidenberg: “There is no business arrangement”

Q: Talks with FCC?

Both Schmidt and Seidenberg. Yeah, we’ve talked to them.

Seidenberg: We’re doing this call now to clear up erroneous reports.

Missed a question. Apologies.

Q: Please talk more about the alternative non-public internet thing you’re talking about is. What is it? And why not run it w/same rules as public internet. And Eric, are you really sure you won’t use this thing?

Schmidt: Nope. We won’t’. “We love the public internet”

Seidenberg: We’re not saying there’s an alternative internet or that we’ll build it. But if someday someone builds it, we’d like to be able to use it.

Q: OK, so what would an entertainment service on this non-public Internet be like?

Seidenberg. I’ll give you an answer “and then you’ll trivialize it”. But! Let’s say the Metropolitan Opera wants to do 3-d broadcast. Maybe they don’t want to use the public internet for that.

Q: I know there’s not a business arrangement. But why do it behind closed door?

Schmidt “This is not a deal. This is a joint policy announcement”. It’s in everbody’s interest to follow the policy, and that’s what we’ll do.

Seidenberg: “Ditto!”. And of course, we’ve talked to others as well. Carriers, folks in government, etc.

Q: All of these services (like video) are moving into IP networks, which is the Internet. So what wouldn’t be in included in the public internet here?

Seidenberg: Do you think 3-d should go over the internet? Then recites talking points from memo again. “It’s not that difficult” to understand.

Schmidt thanks everyone for getting on call (No problem!). And thanks for Verizon management for their help on this, because it’s a really big deal for everyone in the United States.

Call ends.

[Image credit: James Thompson]

That’s the counsel from Barclays analyst James Ratcliffe, who thinks concern about FCC head Julius Genachowski’s “third way” proposal is overblown.

Genachowski’s plan–in short, he wants the power to regulate broadband, but promises not to really regulate broadband–shouldn’t have surprised the market. Because that’s basically what he’s been saying for some time. But yesterday cable stocks like Comcast (CMCSA) and Time Warner Cable (TWC) tanked (before everything else tanked) on his most recent pronouncements.

Relax, says Ratcliffe. He thinks the “network neutrality” framework Genachowski wants to install won’t “limit broadband providers from doing anything they reasonably could have expected to do anyway.”

And he spells out exactly what Genachowski wants the power to enforce:

Section 201: Prohibits carriers from unreasonably denying service and requires that pricing for service be “just and reasonable.” In addition, the section requires carriers to connect with other carriers when the Commission finds that connection to be in the public interest.

Section 202: Prohibits carriers from engaging in “unjust or unreasonable” discrimination among customers or localities when it comes to providing or pricing services.

Section 208: Allows individuals or municipalities to complain to the FCC if the terms of the Act are violated, and requires carriers to either correct the violation or respond in writing arguing that the Act is not being violated. Importantly, the section expressly states that the lack of direct damage to the complainant is not grounds for dismissal of the complaint (in other words, there is no requirement that the complainant establish standing in order to complain).

Section 222: Requires carriers to keep customer information and customer usage information confidential. In the telecom world, this applies to call volumes and destinations, primarily. In the broadband world, it would apply to browsing habits, contents and destinations of emails, etc.

Section 254: Would expressly classify broadband as a service for which the FCC is empowered to work toward universal service, and, potentially, enable the FCC to include broadband service in the pool of services which are taxed to contribute to universal service deployment.

Section 255: Requires carriers to make their services usable by people with disabilities, if “readily achievable.”

Sure, the cable guys would like to see less of this, not more. But the cable guys have always had to work with government regulation–the only question is how much and what kind. Most important in Ratcliffe’s eyes is that, “just and reasonable” pricing clause aside, Genachowski is specifically not looking for the ability to regulate rates.

The cable guys’ worry: What if Genachowski changes his mind–or if one of his successors does?

Maybe Genachowski can allay some fears next month when he’s onstage at the D8 conference.

“Recent reports indicate that Google’s Google Voice service restricts calling from consumers to certain rural communities,” the FCC wrote. “We are interested in gathering facts that can provide a more complete understanding of this situation.”

Though Google (GOOG) has until Oct. 28 to file a formal response, the search giant was quick to thump the tub in its defense on its Public Policy Blog. There, Rick Whitt, the company’s telecom and media counsel, argued again that Google Voice is not a traditional phone service and should not be regulated like one.

“Google Voice is not intended to be a replacement for traditional phone service–in fact, you need an existing land or wireless line in order to use it. Importantly, users are still able to make outbound calls on any other phone device,” Whitt wrote. “…AT&T apparently now wants web applications–from Skype to Google Voice–to be treated the same way as traditional phone services. Their approach is what a former FCC chairman has called ‘regulatory capitalism,’ the practice of using regulation to block or slow down innovation. And despite AT&T’s lobbying efforts, this issue has nothing to do with network neutrality or rural America. This is about outdated carrier compensation rules that are fundamentally broken and in need of repair by the FCC.”

“Recent reports indicate that Google’s Google Voice service restricts calling from consumers to certain rural communities,” the FCC wrote. “We are interested in gathering facts that can provide a more complete understanding of this situation.”

Though Google (GOOG) has until Oct. 28 to file a formal response, the search giant was quick to thump the tub in its defense on its Public Policy Blog. There, Rick Whitt, the company’s telecom and media counsel, argued again that Google Voice is not a traditional phone service and should not be regulated like one.

“Google Voice is not intended to be a replacement for traditional phone service–in fact, you need an existing land or wireless line in order to use it. Importantly, users are still able to make outbound calls on any other phone device,” Whitt wrote. “…AT&T apparently now wants web applications–from Skype to Google Voice–to be treated the same way as traditional phone services. Their approach is what a former FCC chairman has called ‘regulatory capitalism,’ the practice of using regulation to block or slow down innovation. And despite AT&T’s lobbying efforts, this issue has nothing to do with network neutrality or rural America. This is about outdated carrier compensation rules that are fundamentally broken and in need of repair by the FCC.”

“It’s very obvious that we are pushing the limits of the amount of capacity we have,” Jacobs said, adding that network neutrality regulations should not restrict operators’ ability to manage their networks.

“Operators should have the ability to say: ‘let’s be fair, this person’s moved a lot of data, this person’s used a little’, if they’re paying the same amount, then the person who’s used less will get more access….We are on the side of, yes, you have to be able to do something to manage your network, but it’s not the right thing to go in and say one service or another is OK.”

In other words, Qualcomm (QCOM) favors usage-based throttling. In theory, this should ensure that all customers get their fair share of bandwidth every hour of the day. In practice, however, it has meant something else entirely. So the question remains: If data traffic is to be shaped (and I am not saying that it should be), who will determine how it will be shaped and, more importantly, who can be trusted to make that determination fairly?

Jacobs’s remarks come a day after Federal Communications Commission Chairman Julius Genachowski reiterated the Obama administration’s call for network neutrality.

How quickly things changed. By 2007, Davidson had been joined by 11 other lobbyists, among them a former high-ranking Justice Department antitrust lawyer. And now, two years later, Google CEO Eric Schmidt has been named by President Obama to his Council of Advisors on Science and Technology. In that role he’ll work with a group of distinguished academics and executives–a group that, incidentally, includes Craig Mundie, chief research and strategy officer at Microsoft (MSFT)–to help the administration “formulate policy in the many areas where understanding of science, technology, and innovation is key to strengthening our economy and forming policy that works for the American people.”

Schmidt’s appointment isn’t all that surprising. He served as an informal adviser to Obama during his campaign and he’s a smart guy who’s got some strong opinions about network neutrality, next-generation broadband, and intellectual property–issues that figure high on the president’s tech agenda. Still, it’s one more indication–and the biggest one yet–that Google has become firmly part of the Washington establishment.

If so, you might want to download the aptly named “Switzerland”–a tool that tests whether your Internet provider is violating the principles of so-called “network neutrality.”

Network neutrality, which prevents carriers from blocking traffic or manipulating the speeds of traffic from certain Web sites, became a hot-button issue several years ago when carriers suggested they should be allowed to charge content providers more for using faster lanes on their networks.

The issue resurfaced last summer when the FCC determined that Comcast (CMCSA) had interfered with its subscribers’ use of a file-sharing technology, called BitTorrent, a free application used to distribute sometimes large software and media files. Comcast is contesting the ruling.

Read the rest of this post

But–as many readers have requested–they will all be available in their entirety in this column.

Here’s an interview Walt Mossberg and I did with Federal Communications Commission Chairman Kevin Martin and Verizon Wireless (VZ) CEO Lowell McAdam jointly. We paired the two together to talk about big issues facing the wireless industry, including low broadband speeds and high prices.

The video of the interview is in three parts, all of which I will post this week.

In this second part, McAdam talks about the wireless giant’s open network initiatives and the impact of aggressive efforts by Google (GOOG) in the space, termination fees and subsidy issues, while Martin discusses the key issues the FCC will be facing, including the transition of the broadcast industry from analog to digital and network neutrality.