Qwest

Many have missed the high significance of the NTIA Commerce Department report: "Networked Nation: Broadband in America."

• In particular, press reports, which zeroed in on the histrionics of broadband critics, totally "missed the proverbial forest for the trees" on this one.
• The fact is that this report is a very big deal for national broadband policy.    

First, this official United States Government report represents the consensus policy thinking and sign-off of all the many parts of the United States Government involved in setting United States broadband policy, including but not limited to: NTIA, FCC, FTC, USTR, CEA, OMB, OSTP, and the Federal Departments of Commerce, Treasury, State, Justice, and Agriculture. 

Second, this is the first and only official and comprehensive U.S. Executive Branch assessment of U.S. broadband strategy/policy and of U.S. progress in deploying broadband. Broadband critics can no longer say there is no official or clear U.S. Government broadband policy, because here it is:

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.

Verizon's announcement that it will allow customers to choose any app and/or any device on its entire network in 2008 is proof positive that competitive market forces best serve consumers, not rigid net neutrality regulation or legislation.

I see three big takeaways from the Verizon announcement: consumer protection/reliability; market discipline, and more diversity of consumer choice.

The Big Government advocates who try to paint the U.S. as falling behind in broadband so they can justify an activist National Broadband Policy -- have a huge and embarassing hole in their argument -- the U.S. lead in wireless/mobile broadband, including U.S. leadership in transitioning prime analog TV spectrum to mainstream digital broadband use.

• The World Radio Conference of the UN, which is wrapping up this week in Berlin, indirectly showcases this U.S. lead in mobile broadband.
  • Per the International Herald Tribune, the U.S. is way ahead of the rest of the world in transitioning analog broadcasters to digital and reallocating this best-available spectrum for mobile-broadband use --
    • IHT: "The world is in varying stages in going digital, with U.S. broadcasters switching by 2009, Asian broadcasters by 2015, and most European countries somewhere in between." 
  • So how does being 2-6 years ahead of our international competitors in bringing the best available spectrum for mobile broadband to consumers -- constitute "falling behind" or "a failure of no national broadband policy?"

This U.S. world leadership in transitioning prime spectrum to optimal consumer use is powerful evidence of the superiority of our broadband policy approach, which embraces market forces more than just about any other major country in the world.

The FreePress Comcast petition has an unreasonable view of what "reasonable" network management is in the FCC's net neutrality policy.

First, the petitioners ignore the reason the FCC exists in the first place -- the absolute necessity for some network management in order for communications systems to function as needed.

• The predecessor to the FCC, the Federal Radio Commission was created in 1927 because of the chaos of an completely unmanaged network (like the petitioners currently are advocating for) --
  • too many stations were broadcasting on too few frequencies making the airwaves a garbled and unworkable "tragedy of the commons."
• The Government brought order to this chaos by granting the FRC/FCC the authority to make spectrum licensed property, grant licenses, and assign frequencies and power levels for each license.  

Second, the petitioners ignore that "reasonable network management" of communications is directly analogous to reasonable traffic management of our roadways.

Tim Wu, the "father of net neutrality" because he made up the term a few years back, was surprisingly candid in a CNET article that: "the whole net neutrality issue is really about a power struggle."

• Well we now know net neutrality is not about:
  • A supposedly longstanding non-discrimination "principle" of the Internet;
  • all bits being equal; or
  • freedom of speech.
• It's about "power."
  • We knew it all along. 
    • It's really about the "power struggle" over corporate welfare for the dotcom billionaires at Google and eBay who want the consumer to subsidize their piggish bandwith demands in order to maintain their 90% gross profit margins.  

I also found another candid quote by the Moveon.org/FreePress folks that also tells us what they are up to:

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.

The American Consumer Institute did some more great work on the importance and impact of broadband. Kudos!

• I recommend you take a look at their eye-opening new study: "Broadband Services: Economic and Environmental benefits." 
• The premise is that promoting broadband is smart national policy because of the tremendous cumulative productivity and energy savings that more broadband use enables.

The summary table on page 48 encapsulates the study's findings well.

Why is net neutrality not Green?

• The current free market broadband policy is succeeding greatly in rapidly deploying broadband to all Americans and in promoting facilities-based broadband competition.
  • The FCC's latest broadband competition report that just came out shows that U.S. high speed connections grew an astounding 61% in 2006 from ~50m users to ~80m users.
• Even the serious prospect of net neutrality legislation becoming law would chill investment and discourage continuation of the broadband success that the current free market policy has generated.
  • Net neutrality is not Green because it would slow the extremely environmentally beneficial trend of increased broadband use, which creates massive national energy savings as the American Consumer institute study attests.  

I guess the World Economic Forum folks did not "get the memo" from net neutality proponents that the U.S. is supposed to be falling behind competitively because of broadband. 

The Wall Street Journal reported today that: "U.S. tops Report on Competitiveness By World Economic Forum." 

• Not only is the U.S. #1 in the world in competitiveness in the report, the U.S. also moved up in the ranking this year. 
• This World Economic Forum report tracks closely with the latest Economist Intelligence Unit's Global Digital rankings, which have the U.S. tied for second in the world.

The OECD's questionable methodology  ranks the U.S. 15th in the world on broadband; however, FCC Commissioner Robert McDowell gave a great speech that systematically debunked the OECD's agenda-driven methodology and rankings.   

• Neutrality proponents often cite the OECD rankings as "proof" that net neutrality regulation is needed in order to improve American competitiveness in the world.

However, both the World Economic Forum and the Economist Intelligence Unit rank the US at or near the top of the world in competitiveness.