Deregulation

Larry Downes produced an outstanding analysis for ZDNet today which he entitled "Save Internet Freedom -- From Regulation."

I strongly recommend it as it is one of the most cogent and persuasive pieces I have read in a long time on the subject.

He does a great service by putting the issue into much clearer context -- vis-a-vis other industries and past attempts to regulate where the government shouldn't have. 

I always enjoy learning about a new fresh take on an old issue.

Kudos to Dr. Daniel Ballon who wrote a great editorial on net neutrality for The Hill newspaper: "Net neutrality punishes everyone for Comcast's actions."  

He recounts a great analogy about how "neutral" networks on Black Monday, the stock market crash of October 19, 1987, was made worse by a traffic jam of orders that couuld not be managed in an orderly fashion to keep the stock market functioning and open.

• "After Black Monday, exchanges recognized the need to create “express lanes” and prioritize traffic to ensure orderly market function. The chairman of the House Telecommunications and Finance Subcommittee, Rep. Edward Markey (D-Mass), also understood the benefits of placing “sensible speed limits on our market participants so that individual investors and our biggest market players can happily co-exist.” Markey recognized that neutral markets fail as predictably “as if we turned off all the nation’s stoplights,” and “made all speed limits voluntary.”
  

At its core, the policy of net neutrality, that all traffic is always treated equally no matter what is -- unreasonable, unwise, and irrational.

The Moveon.org/FreePress petition to the FCC to declare Comcast's reasonable network management illegal, is a deceptive back-door scheme to reverse FCC deregulation of broadband as an information service and to (de facto) reinstate common carriage for broadband.

• The petition will be found to be a bogus and manufactured scheme to deceive the FCC and the public that necessary, responsible, and "reasonable network management" -- that serves consumers and the Internet public by delivering quality of service and protecting consumers from the harm of viruses, spam etc. -- should be declared illegal "degrading" of an Internet application.
• Upon full FCC airing of this issue, it will be clear that the offending P2P application traffic is the culprit that is in fact harming the overwhelming majority of Internet consumers by "degrading and imparing" the responsiveness and utility of the Internet for the many because of the irresponsible bandwidth hogging of the few.

First, if managing out-of-control p2p traffic that is degrading and impairing the responsiveness and utility of the Internet for the many by the few is not "reasonable network management" then no network management is reasonable.

I normally consider myself a big fan of Walter Mossberg's technology reviews in the Wall Street Journal, but for today I am a big critic of Mr. Mossberg's woefully uniformed and one-sided opinion piece on public policy "Free my Phone."

Obviously frustrated at the technical reality that the bandwidth availability of telecommunications devices has not kept pace with the faster growth in computer processing, Mr. Mossberg lashes out at public policy as the cause in an emotional diatribe that illogically concludes that "if the government...breaks the crippling power that the wireless carriers exert today, the free market will deliver a... happy ending."

Google's long rumored Google phone
or GPhone project has attracted a lot of comment and chatter, but not a lot of
good analysis to date. One big exception is a very good article last week by
Miguel Helft of the New York Times: "For
Google, Advertising and phones go together."

The charge that many supporters of net neutrality were economically illiterate by Washington Post's lead business columnist Steve Pearlstein in "Whiny Techies II" a few weeks ago which I posted on, prompted more whining from Tim Karr of FreePress/SaveTheInternet Coalition in a Letter to the Editor.

• Karr: "Supporters of net neutrality aren't asking that users pay one fee for all grades of access. We want a truly competitive marketplace where people can choose from numerous broadband companies offering access at different speeds and costs."

Let's have some fun un-packing Mr. Karr's disingenuousness.

Senator Kerry's recent echoing of the call for a "National Broadband Strategy" by House Telecom Chairman Markey and FCC Commissioner Copps -- is really a slick coordinated bicameral campaign to reverse current national communications competition policy and replace it with a Government industrial policy.  

Calling for a "National Broadband Strategy"  implies we don't have one when we do -- and it is the law  of the land -- the 1996 Telecom Act -- and it was supported by over 95% of Democrats and Republicans when it passed during the Clinton administration -- and by the way it is working.

• The purpose of the law is our "national communcations policy/strategy": "To promote competition and reduce regulation in order to secure lower choices and higher quality services...and encourage the rapid deployment of new technologies."
• The part covering the Internet: ""To preserve the vibrant and competitive free market that presently exists for the Internet..., unfettered by Federal or state regulation."
• The part covering promoting new technologies, Section 706: "The Commission...shall encourage deployment on a reasonable and timely basis of advanced telecommunications capability to all Americans..."

What's wrong with that national broadband strategy?

• Nothing.

What's wrong with the progress and achievement of that strategy to date?

It seems the "pixie dust" of "free" municipal wifi isn't so "magical" after all.

• USA Today reports in its page one story today: "Cities turning off plans for WiFi, Complexity, cost doom efforts to create access."

To quote one of my conservative heroes, the late great Milton Friedman, "there is no free lunch."

• The article chronicles the growing trend that cities around the country are finally learning that simple economic lesson -- which should have been obvious to them from the start.
• But how could the cities forget the economic truism that "there is no free lunch" and let their expectations so far exceed reality?
  • The answer lies in how many companies, who routinely expect a "free lunch" from communications carriers (like net neutrality supporters: Google, eBay-Skype, Amazon, Intel et.al), whispered in these cities ears that they could easily have free or very low cost wireless broadband access.
    • The problem that these net neutrality/open access proponents brushed under the rug was that building and operating a wireless broadband network, even a lower cost WiFi or WiMax network, still costs a substantial amount of money, and requires substantial resources and expertise to pull off at a minimum quality level.

Bottomline:  What I hope cities take away from this painful lesson is what they were taught when they were young: "if it looks too good to be true, it is."

If you missed The Washington Post's Steve Pearlstein's incisive and on point critique of how the campaign for net neutrality has morphed, it surely deserves a read -- its short.

See the header "Whiny Techies II" ("Whiny Techies I" is funny too.)  

The US Department of Justice in comments to the FCC said that it is opposed to "net neutrality" per an AP story.

Now both the US Department of Justice and The US Federal Trade Commission, the agencies legally responsible for investigating anti-competitive practices, officially have stated opposition to net neutrality regulation/legislation.