I am in the midst of reading a new and very interesting book called "The Long Tail: Why the Future of Business is Selling Less of More" written by "Wired" editor in chief Chris Anderson. His core brilliant insight is that Internet and digital technology create the "new economics of abundance" in that there is as much opportunity on the long tail of the demand curve as there is in the "head" of the curve where most companies focus. Simply, there is huge growth and revenue opportunity and potential in serving niche markets!
What is interesting is that many of the people who endorse this excellent book on the book jacket are net neutrality supporters who don't seem to following a key piece of the book's advice in "Long Tail Rules: How to create a consumer paradise."
Anderson's Rule 5 is: "One price doesn't fit all." Anderson writes wisely on page 221: "One of the best understood principles of microeconomics is the power of elastic pricing. Different people are willing to pay different prices for any number of reasons, from how much money they have to how much time they have." Simply people and demand is different and thus prices should reflect those differences.
Neutrality-ites' mantra is non-discrimination in prices, terms and conditions which is a perjorative fancy way of saying one price and one product for all. Neutrality-ites oppose a two-tier Internet despite the fact that multiple tiers of speed and pricing have long existed.
Listen to lead neutrality-ites appropriate praise of The Long Tail:
Eric Schmidt, CEO, Google: "Anderson's insights with The Long Tail influence Google's strategic thinking in a profound way."
Lawrence Lessig, Stanford Professor: "There isn't an economy here. There are economies. Understanding them and how they flourish, is the key to sensible policy and successful business. Wipe the shelf clear of new economy books. This is all you'll need."
Terry Semel, CEO of Yahoo: "The Long Tail is the first book to explain exactly how the ability to reach niche markets creates big opportunities."
I ask these prominent neutrality-ites why Anderson's "one price doesn't fit all" works so well for them, but not for the bandwidth or broadband market. Why can't broadband prices be different and lower for the long tail of the broadband market? Why can the online giants follow niche markets to riches, but they are demanding a law that will keep broadband as one size fits all? If Anderson's thesis is right, which I think is, and Google, Yahoo and Lessig agree, why shouldn't the broadband market be able to differentially price in order to maximize growth and consumer welfare like the online giants can?
I am afraid the answer is clear. Google, Yahoo, eBay, and Microsoft want to lock in their current market advatage permanently in law by effectively banning broadband providers from competing against them. NN isn't about being neutral it is about being pro-online giant.
