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Net Neutrality

More rebuttal of CNET Executive Editor's blast of my NPR commentary

Given that Mooly Woods, Executive Editor of CNET blasted my NPR commentary on NN but will not give me equal time to respond, I am sharing with you my rebuttals to her points that I had to post in her comment section.

Homefield advantage

Posted by Scott Cleland (See profile) - July 7, 2006 1:55 PM PDT

Thank you for reply. I am not surprised that you chose the least distribution option for our back and forth, it suggests you would rather not have your general readership, hear the other side or the rebuttal of your position. I respectfully repeat that if you think this is an important issue and you really want a fair airing of it, I request again that you have a podcast debate on this or at least give me the opportunity to do a CNET guest column or interview to balance your view.

Hillary & the net neutrality free-market litmus test

The Financial Times report on "Hillary Clinton warms up Wall St." is highly relevant to the net neutrality debate, which has become surprisingly partisan with the Democrats on the Senate Commerce Committee voting as a block in support of the hyper-regulatory approach of the Snowe Dorgan bill. Previously, Sen. Clinton sent around a "Dear Colleague" letter in support of Snowe Dorgan. 

Google's Airplane -- What corporate welfare for dotcom billionaires can buy

For anyone that missed the WSJ article on the lawsuits over Google's opulent refurbishing of their personal 767 airplane -- it was just too precious for words.

Apparently the Google founders were fighting over who would get the king-size bed in their private bedrooms on the airplane and who would get the hammock. Kid you not. Read the article.

My point here is that Google is the lead in asking for NN -- special interest legislation to protect Google from broadband competition and to get a special government regulated price terms and conditions -- when the rest of us poor saps that fly coach pay the full competitive price for our bandwidth.

NN is corporate welfare for dotcom billionaires that obviously don't need the subisidy. 

   

My reply to CNET Exec Editor blasting my NPR NN Commentary as "lies"

CNET Executive Editor, Molly Wood, blasted my NPR Morning Edition NN Commentary as "lies" in her column recently, trying to rebut my statements one by one in "Net Neutrality: Bring it on". 
http://www.cnet.com/4520-6033_1-6548559-1.html?tag=nl.e501

I replied in a comment to her post as soon as I learned of the personal attack. My comment/reply is found below in its entirety. I believe in CNET and Molly's sense of journalistic fairness and integrity that I will be given the opportunity to respond in detail to her assertions in a forum of their choosing.

NYT article on why price discrimination best serves consumers

Today's New York Times article by Robert H. Frank is an excellent and clear explanation of how price discrimination best serves consumers. Mr. Frank is an economist at Cornell. One of his headlines says: "If price discrimination seems wrong, try taking another look."

The neutrality-ites have used buzz-word blackmail in Washington to try and make those who oppose NN as being "for discrimination." Discrimination is understandably a bad word politically becuase a lot of people have been unfairly and illegally discriminated against in our country's history and it still goes on today. 

Defending eBay's right to differentiate and be hypocritical

Scott Wingo's eBay blog points out that eBay is blocking Google's payment service, http://ebaystrategies.blogs.com/ebay_strategies/2006/07/ebay_bans_googl.html  obviously to leverage its own Paypal service.

I strongly defend eBay's right to differentiate their service and believe the market will sort this out over time. If eBay's customers throw a hissy fit and clamor for Google's payment option, eBay will have to adjust. My guess is they have already made that calculation and believe that the vast majority of their users use and prefer Paypal. (Think of this as eBay giving a metaphorical "stiff-arm" to Google's face for attempting to tackle Paypal. Not nice but perfectly within the rules of competition. It will be interesting to see if Google whines about this stiff-arm like it whines about everything else that doesn't go their way.) 

Intel is NOT putting it's money where its mouth is!

Intel, a supporter of Itsournet.org and NN regulation, apparently hedged its NN bets yesterday, investing $600m in Clearwire, which does not have NN and which is Craig McCaw's WiMax venture to offer more broadband competition nationwide to the telephone, cable and wireless companies. Clearwire is a member of the WCA, the wireless broadband association, which recently joined NETCompetition.org as an e-forum member opposed to NN regulation.

This is Intel's biggest venture investment ever. Given the success of WiFi, which Intel strongly nurtured in order to accelerate the replacement cycle of laptops, they clearly see the same opportunity in WiMax. It is very important to note that WiFi has never been subject to NN rules nor has WiMax nor has Clearwire's WiMax-like technology. And to date Clearwire has offered a differentiated offering that it could not do if subjected to Snowe-Dorgan NN rules.

Critique of Wash Post's Sunday NN Article

After speaking with the Washington Post reporter for over a half hour on Friday to help with their Sunday Q&A article on NN, http://www.washingtonpost.com/wp-dyn/content/article/2006/07/01/AR2006070100138_pf.html I was dismayed with the many inaccuracies and the lack of balance in the article. The reporter explained they wanted to present both sides; their attempt fell short. After getting back from the long Fourth of July weekend, I just had to set the record straight.

 

To be fair, on the positive side, their call-out-box explaining the opposing NN positions was generally accurate and useful. I also commend the Post for trying to share both sides and attempting to better explain this important issue. 

 

However, on the negative side: The biggest weakness in the article was the very imbalanced introduction that framed and skewed the article for everyone.

 

The third sentence bought hook line and sinker, one of the main incorrect premises of NN that I clearly rebutted when I talked to their reporter. “Whatever becomes of the concept could affect…the sites you’ll have access to…” Broadband companies have made clear that they have no intention or incentive to block access to legal sites or degrade peoples’ online access. As I told the reporter, these unsupported allegations were at the heart of the NN misinformation. If the article were fair, it should have at least explained on what basis the reporter believed the unsupported allegations to be true and why the companies’ statements to the contrary should be summarily dismissed without reference.

 

Debunking NN Myth #4

Neutrality-ites claim Network neturality is a principle.

Their defense of it belies the fact that NN is NOT principled.

They justify new NN regulation by asserting there is a duopoly and market failure. If the motivation is principled, why do Snowe-Dorgan and the Markey bills apply monopoly net neutrality rules to competitive broadband providers like wireless, new entrants like WiMax and free services like WiFi? If it is truly a necessary "competitive" principle, why not apply it to Microsoft, which the government ruled a monopoly, or Google and Yahoo which are quickly becoming the defacto duoploists of search? Real principles are not double standards like NN.

Debunking NN Myth #3

The nuetrality-ites are hiding behind the premise that NN regulation is warranted because its a telco-cable duopoly with 98% share; they believe this means there is market failure warranting government price regulation.

This is very lame and misleading analysis.

First, the expert agencies: the FCC the Department of Justice Antitrust Division, and the Federal Trade Commission all disagree with the NN assertion that the broadband market is not competitive and hence warrants regulation. 

Second, the duopoly assertion ignores the context which is highly relevant. While dial-up was essentially a monopoly, the 1996 Telecom Act addressed that by encouraging competition. Cable modems were a new market and cable created massive competitive pressure on dial-up and on DSL which was forced to lower its prices to attract customers. This Market is not a duopoly, it is a very dynamic market that is in successful transition from a monopoly eleven years ago to a competitive market today.  

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Q&A One Pager Debunking Net Neutrality Myths