iHypocrisy?
After fourteen years of diligently dodging any public position on net neutrality on principle, while operating the largest non-neutral, non-free, non-open, Internet network of smart devices on the planet, Apple Inc. is now taking a “principled” public position for net neutrality, and a free and open Internet, because Apple now tells the FCC in its net neutrality public comments that Apple now believes in the principles of consumer choice, no paid fast lanes, transparency, competition, investment, and innovation. iHypocrisy.
Let me be crystal clear here.
I am a longtime iPhone user and big Apple fan. I have long publicly defended their freedom to maximize the value of their patented innovations and property-rights driven business model and value creation strategy. I strongly defend their right to free speech and their right to reverse their “principled” position when their business needs warrant it, like wanting to save money on bandwidth for Apple’s new streaming services because it is losing money on streaming now that it invested a billion dollars in new video content over the last few months.
I also do not have any problem with Apple being the most valuable company on the planet worth $847b -- $15b more valuable than the top seven broadband ISPs: AT&T, Verizon, Comcast, Charter, T-Mobile, Sprint, and CenturyLink, because that is the free market at work.
Never mind that the “strongest possible” utility regulation of competitive broadband companies under Title II that Apple now is advocating for, is the antithesis of public policy that has enabled Apple to innovate, succeed, and thrive on its own competitive merits over the last four decades.
That said, I have a very big problem with a company deceptively trying to influence an important public policy issue like net neutrality claiming to support popular principles, when the company knows full well that it has long operated, and still operates, in large opposition to those same principles, effectively saying one thing and doing another. iHypocrisy. Spinnovation at its worst.
To see why Apple Inc. has wisely stayed silent on the net neutrality sidelines until now, let’s compare Apple Inc.’s new found “principles” in its comments to the FCC -- with what Apple actually does.
Consumer Choice: In its comments, Apple supports consumer choice. Anyone that knows Apple and its design lore and unique design success, knows that Apple offers what it believes is best for consumers and by design prevents all kinds of choices for consumers, because those choices would undermine how Apple’s highly-integrated devices work. Steve Jobs well-known genius was giving consumers what they wanted before they even knew it was what they wanted or needed. And Apple prides itself on having limited consumer choices in devices and prices compared to its competition. Limiting consumer choice to Apple’s choice has been central to its phenomenal success.
No paid fast lanes: In its comments, Apple opposes paid fast lanes. However, Apple has paid for fast lanes for itself is investing and paying for elaborate content delivery networks (CDNs) to ensure that its content gets prioritized treatment over competitors that don’t use CDNs. Awkward.
Transparency: In its comments, Apple advocates for mandatory transparency for broadband providers. Once again, anyone that knows Apple and how it operates as a company, designer, and manufacturer of iconic smart devices knows that Apple is exceptionally secretive and non-transparent about most all aspects of its business. What is good for the goose apparently is not good for the gander.
Competition: In its FCC comments, Apple advocates for competition in its FCC comments. Apple did not worry about competition when it originally launched its iconic iPhone with its competitive choice of four wireless providers AT&T, Verizon, Sprint and T-Mobile, and chose to exclusively launch the iPhone via one provider AT&T, which was its competitive right to do, and a competitive choice I defended on this blog at the time.
Now it gets really awkward.
Apple has officially had at least three antitrust problems if recorded history is any measure. In 2009, Apple was reprimanded by the FTC for engaging in anti-competitive behavior for having an illegal “inter-locking directorate” in having Google’s Chairman on Apple’s board when they were the two primary smartphone providers. In 2010, Apple was sanctioned by the DOJ for illegally colluding with anticompetitive employee non-solicitation agreements. Apple and others later settled the matter civilly for over $400m. In 2013, a Federal judge ruled that Apple violated antitrust law in conspiring to fix eBook prices per a DOJ lawsuit, a ruling that was upheld by the Supreme Court when it denied to hear Apple’s appeal in 2016. Finally, Apple charges a whopping monopoly-esque 30% fee for app providers to offer apps to the public on Apple’s closed system on Apple’s de facto monopoly App Store. Cringeworthy awkward.
Investment and Innovation: In its comments, Apple advocates for investment and innovation. It is especially rich and un-self-aware when Apple criticizes the broadband industry about capital investment when the broadband industry has invested more in United States’ based capital investment than any other industry, upwards of a trillion dollars in the United States Internet infrastructure over the last two decades. It is doubly rich and un-self-aware, when Apple more than any U.S. company, has gone out of its way to invest overseas and keep its capital and its manufacturing jobs overseas -- as it is free to do.
Apple’s ihypocrisy and PR problem here is not what it has done with its own business, but the fact that it is sanctimoniously publicly advocating for maximal regulation of another industry that has done nothing wrong to warrant it, when broadband companies have maximally invested in the U.S. in U.S. jobs when Apple has long done the opposite.
In sum, Apple is the worst advocate imaginable for net neutrality and a free and open Internet.
Most every part of Apple’s ecosystem is non-neutral, non-transparent, closed and discriminatory -- all legitimate business decisions that make Apple the iconic Apple that it is.
Apple is reportedly poised to sell a thousand-dollar iPhone, and tens of millions of people will buy them and their new peripherals because they are the best smartphones available – but they are not free and hardly anything Apple offers is free.
Finally, as the penultimate Internet walled garden, Apple and its ecosystem are the antithesis of what supporters of a free and open Internet define as a free and open Internet.
Those in glass houses should not throw stones.
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Scott Cleland served as Deputy U.S. Coordinator for International Communications & Information Policy in the George H. W. Bush Administration. He is President of Precursor LLC, an internetization consultancy for Fortune 500 companies, some of which are Google competitors, and Chairman of NetCompetition, a pro-competition e-forum supported by broadband interests.
