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Innovation

Google now tying website speed to search ranking -- Why is that anti-competitive?

Google announced 4-9-10 that "we've decided to take speed into account in our search rankings" in a Google blog post by Amit Singhal and Matt Cutts entitled: "Using site speed in web search ranking." (Thanks to the Register's Cade Metz for flagging this issue.)

Two don't miss op-eds to read today: FCC Commissioner McDowell's & John Kneuer's

I highly recommend two oustanding op-eds that you should be sure to read if you care about the future of the Internet and FCC matters:

  • FCC Commisioner Robert McDowell's outstanding op-ed in the Washington Post today entitled "Hands off the Internet"; and
  • Former NTIA Administrator John Kneuer's different and excellent take in his op-ed for the Daily Caller today entitled "A Hippocratic Oath for the Internet."

     

     

     

     

 

Harms of a Potential New FCC De-Competition Policy -- Reply comments to FCC Open Internet NPRM

The FCC's proposed Open Internet Regulations and/or the oft-rumored potential re-classification of broadband as a Title II telephone service effectively would create a new FCC "de-competition policy." (For the one-page PDF submitted to the FCC click here)

 

A new FCC "de-competition policy" would:

Required viewing for New America's wireless whiners

Don't miss the hilariously poignant comedy video clip (4 min) of comedian Louis C.K. from Conan O'Brien's show on how "everything's amazing and nobody's happy."

  • Louis C.K.'s lampoon of how ridiculous it is to whine when new amazing phone and broadband technology does not work perfectly or immediately, should be required viewing at the New America Foundation's planned whine-fest "panel discussion" entitled "why your cell phone is so terrible," which I previously blogged about yesterday. 

Like the parable of the boy who blurted out the truth that the emperor had no clothes on, after the emperor was duped by tailors claiming to use "special" thread only visible by "smart" people, the folks at the New America Foundation/FreePress are trying to dupe the FCC into mandating new net neutrality regulation by claiming that everyone who is really "smart," like the folks at New America, know that cell phones are "terrible." 

If you did not read my systematic rebuttal of how ridiculous a premise that cell phones are "terrible" is, please see my previous post for the evidence-laden case.        

 

 

 

 

 

Swanson: Innovation doesn't come from Government -- Read his new great op-ed

Entropy Economic's Bret Swanson has another great, clear-thinking op-ed that I recommend you read, this time in RealClearMarkets.com entitled: "Entrepreneurial Innovation and the Internet."

Bret incisively captures the amazing and dynamic nature of innovation in the currently unregulated Internet ecosystem, and cautions against Washington imagining that the Federal Government can do better than free market competition can with top-down innovation micro-management from slow-moving bureaucracies.

His piece also helps spotlight the huge disconnect over where innovation comes from. 

  • FreePress, Public Knowledge and other net neutrality proponents imagine that Government regulations, restrictions and limitations on the freedoms of property owners somehow magically will foster more net innovation by those who don't believe in private property.
  • Google, eBay and Amazon imagine that they can increase overall Internet innovation, if the FCC would only require broadband providers and potential competitors to seek permission from the FCC, (and by proxy -- permission from Google, eBay and Amazon) before they implement any network innovations in the marketplace.      

It is naive to think that FCC regulation can surgically micromanage what innovation is good and allowed and what innovation is "bad" and discriminatory -- before the fact.

Key ACI study shows regulation is anti-innovation

Kudos to Larry Darby of the American Consumer Institute for his outstanding new study on the destructive effect of regulation on innovation. Please read it if you are at all interested in innovation.

The study debunks the views of some that government, regulation and regulators are somehow a font of innovation. 

After reviewing the relevant literature and evidence on the subject, Dr. Darby concluded that:

  • innovation is naturally flourishing without government involvement or micromanagement;
  • burdening broadband providers with new common carrier burdens would severely discourage innovation; and 
  • limiting innovation in one part of the ecosystem would ultimately diminish innovation in the entire Internet ecosystem.

At core, the new notion floated by some that more FCC regulation would encourage innovation is nonsensical and unsupported by any literature or evidence.

The big takeaway here is that new "Mother may I" regulations, which effectively require some market participants to get FCC approval for their innovations, in order to protect or advantage others' innovations, is not innovation policy. It is old-fashioned industrial policy where government picks market winners and losers. This is a policy approach long proven to grossly underperform market-based policies.

 

   

 

 

 

 

 

 

Stress-testing Google's Top Ten Antitrust Defenses -- Part IV of Antitrust Pinocchio series

Google announced it was under preliminary investigation by EU Antitrust authorities due to several antitrust complaints filed against it, and it began to frame its antitrust defense against the charges.

  • How well do Google's top ten antitrust defenses hold up to scrutiny?  

    1.   "This kind of scrutiny goes with the territory when you are a large company." (Julia Holtz, Google's Senior Competition Counsel, Google Policy Blog post

    • No. Over 99% of the Global Fortune 1000 are "large," but are not under antitrust investigation for monopolization.
    • This kind of antitrust scrutiny occurs to a very select few companies -- only companies that serially act anticompetitively. 

    2.   "We've always worked hard to ensure that our success is earned the right way -- through technological innovation and great products, rather than by locking in our users or advertisers, or creating artificial barriers to entry." (Julia Holtz post)

How much should Google be subsidized?

Pending FCC policy proposals in the National Broadband Plan and the Open Internet regulation proceeding would vastly expand the implicit multi-billion dollar subisidies Google already enjoys, as by far the largest user of Internet bandwidth and the smallest contributor to the Internet's cost relative to its use.

Interestingly, the FCC's largely Google-driven policy proposals effectively would:

  • Promote Google's gold-plated, 1 Gigabit broadband vision for the National Broadband Plan at a time of trillion dollar Federal budget deficits;
  • Recommend a substantial expansion of public subisidies for broadband that would commercially benefit Google most without requiring Google to contribute its fair share to universal broadband service; and
  • Regulate the Internet for the first time in a way that would result in heavily subsidizing Google's out-of-control bandwidth usage. 

I.   Does Google need more subsidies?

Google is one of the most-profitable, fastest-growing, cash-rich companies in the world, with over $10b in annual free cash flow, 17% revenue growth, and ~$25b in cash on hand.

Google to DOJ/Court on Book Settlement: Good Intentions Trump the Law

Google effectively blew off the DOJ's antitrust, copyright and class action objections to the amended Google Book settlement in Google's 77-page brief to the Federal Court adjudicating the settlement. 

In a nutshell, Google argued that its settlement is "remarkably creative" (p 28), and "fair, reasonable and adequate" (p 67). It focused on the settlement's benefit to humanity: "the benefits of approval are bounded only by the limits of human creativity and imagination" (p 2). Google also effectively instructed the Judge to accept its redefinitions of copyright, antitrust, and class action law and to reject the DOJ's interpretation of the law and its "cramped view of the court's jurisdiction" (p 10).    

The core thrust of Google's argument is political. Google essentially asks the court to make a political, not a legal, decision to:

  • Disregard existing antitrust, copyright, and class action law;
  • Ignore the opinion, expertise and standing of the DOJ, the United States' Chief Law Enforcement Officer;   
  • Effectively rewrite copyright law; and
  • Permanently enthrone Google as effectively the derivative use caretaker and gatekeeper of millions of "orphan works" which Google illegally copied.  

I.   Google's argument is fundamentally political.

Google's Privacy "Buzz" Saw -- Privacy vs Publicacy Series Part XIX

Kudos to Nicholas Carlson of Silicon Valley Insider for an outstanding must-read post on Google's new social media additions to gmail it calls Google Buzz: "WARNING: Google Buzz has a huge privacy flaw."

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Q&A One Pager Debunking Net Neutrality Myths