Neutering Neutrality

A federal court struck a blow against the concept of Internet neutrality in a ruling that could affect not only how we use the Net today, but also the expansion of the Internet in the years to come.

On April 6 the U.S. Court of Appeals for the District of Columbia ruled that the Federal Communications Commission does not have the authority to require broadband providers to treat all data flowing over their networks equally – a key component of Net neutrality.

While Net neutrality isn’t the law of the land, it is the policy of the FCC. In its simplest form, the concept calls for all providers to refrain from playing favorites, such as fast-tracking one company’s bytes at the expense of another. Or, for that matter, impede access to an individual’s blog, Web site or MySpace page so that Big Business enjoys faster and wider pipelines.

The case had its roots in 2007 when Associated Press discovered Comcast was hindering peer-to-peer file-sharing traffic across its networks by sending “hang up” messages to both senders and receivers in P2P exchanges when both sides were Comcast users.

The FCC held hearings on the matter in 2008, with then-chairman Kevin Martin saying he wanted to make an example of Comcast. But policy is not the same as law, and even though the FCC’s policy was to favor Net neutrality concepts, it wasn’t clear two years ago as to whether the Commission could legally force broadband companies to adhere to Net neutrality guidelines.

Now we have an answer. And it doesn’t bode well for neutrality advocates.

By ruling the FCC does not have the authority to push Net neutrality concepts on broadband providers, the court opened a whole new can of virtual worms for both Internet companies and individual users. Already several broadband outfits, including Comcast, AT&T and Verizon, have argued that after spending literally billions of dollars on network upgrades, they should be able to sell premium services to other companies, such as faster data pipelines and connections.

But smaller companies, as well as individuals, have expressed concerns that the Internet will eventually become the information superhighway for only the rich and powerful, and that small companies won’t be able to compete if broadband providers invoke network management policies favoring major businesses over ma-and-pa outfits.

Now that the court of appeals has ruled the FCC does not have the authority to regulate broadband companies, the Commission is faced with either appealing the decision or asking Congress to grant it the authority.

Meanwhile, the FCC released a statement saying it remains “firmly committed to promoting an open Internet and to policies that will bring the enormous benefits of broadband to all Americans” and “will rest these policies … on a solid legal foundation.”

iPad Numbers

How many iPads did Apple sell April 3, the first day the latest must-have gadget from Jobs & Co. appeared in stores?

Apple says it delivered 300,000, but that figure may be slightly misleading if only because that includes not only iPads sold directly by the company through its retail outlets, but also units shipped to other retailers such as Best Buy. That’s why Apple said it “delivered” 300,000.

As to whether iPad will move past its immediate consumer base of Apple fans and tech junkies remains to be seen, but the device is definitely off to a good start. Although Apple never publicized first-day iPhone sales, later earnings reports indicated the company sold approximately 270,000 units during day one of the mobile’s June 2007 rollout, and went on to sell 1.1 million more iPhones during the following three months.

The date for the rollout might also have influenced sales. Although Apple introduced iPhone at the end of June 2007 only days before the Fourth of July weekend, iPad’s debut occurred on Easter weekend, a time when many consumers might have been observing the holiday with their families rather than lining up for the latest gizmo.

Plus, the crop of $499 iPads that hit stores April 3 only connects to the Internet via WiFi. Folks wanting iPads with a 3G connection will have to wait until Apple starts selling the $629 version at the end of this month.

One of the least-publicized reasons to buy an iPad isn’t about the size, weight, ease-of-use or even the thousands of applications available through Apple’s App Store. Instead, one possible advantage the iPad has over laptop computers is that you won’t have to remove it from your travel bag when passing through airport security.

Because the iPad is pretty much self-contained and does not come with extra devices like external drives and batteries, the Transportation Security Administration says the unit will probably show up clearly on airport scanners, eliminating the need to take it out of the bag to show security inspectors.

Rhapsody Changes

If you’ve been on the fence about those music-in-the-cloud services that stream tunes to computers and mobile devices, Rhapsody recently dropped its subscription prices, giving you another reason to listen to tracks you do not own.

Rhapsody’s latest subscription package – Rhapsody Premier – includes unlimited online and home listening as well as one external MP3 player and one mobile device to the service for a tempting price of only $9.99 per month, almost one-third lower than its previous $14.99 per month rate.

Actually, the old price was a bit more complicated. The basic subscription price, which didn’t include using an MP3 player with Rhapsody, was $12.99. Adding a player boosted the subscription to $14.99.

Oh, sure, you can still spend $14.99 on Rhapsody. That is, if you need to use up to three mobile devices and three MP3 players, but the $9.99 rate should satisfy most music fans who prefer to have music streaming from the cloud rather than purchasing CDs or downloading digital files.

The subscription package is one of the new offerings from Rhapsody, which counted approximately 675,000 subscribers at the end of 2009 and recently broke its bonds with its corporate masters.

Now an independent company, Rhapsody’s former parents are now its biggest investors, with MTV Interactive and RealNetworks each holding an approximate 47.5 minority stake in the company.

Rhapsody also tweaked its corporate image, employing a new logo as well as a new name – Rhapsody International Inc.

Rhapsody does have somewhat of an advantage over other streamers, most notably Napster. For one, its recent emergence from under the RealNetworks / MTV Interactive umbrella netted the company $18 million from the former and a $33 million credit from the latter. So the financial pump is primed for some changes. Like adding an app for mobile phones based on Google’s Android platform. Rhapsody released an iPhone app in September 2009.