Competition

Unfounded pessimism and fear about the future of broadband competition is behind the call for net neutrality. I have released the third one-pager in my series: "Debunking the "Broadband Competition Can't Work" Myth. This analysis is an excellent companion piece to the previous piece in the series Debunking the "Broadband Market Failure" Myth.  

The Philadephia Inquirer published my letter to the editor today on Net Neutrality. 

With all due respect to Craig Newmark of Craigs List, I had to challenge his one sided and twisted characterization of Net Neutrality "fairness" in his Philadelphia Inquirer Op Ed a couple of weeks ago.

Craig and I have debated through commentary on National Public Radio and I respect his sincerity but disagree wholeheartedly with his point of view.

I wanted to highlight a new academic study that argues that net neutrality could be harmful to consumers, produced by none other than the University of California Berkley's Business School which is well-known for its close ties to Silicon Valley. I guess everyone in the Valley did not get the "memo" so some of its top academics are doing some free and open thinking about Net Neutrality and its potential impacts on consumers. 

The academic study is entitled: The Economics of Product line Restrictions with and Application to the Net Neutrality Debate." I know and respect one of the study's authors, Micahel Katz from when he did this type of analyisis very ably in the real world of evaluating competition at the FCC as their Chief Economist and as a Senior official in the Department of Justice Antitrust Division. His analysis will carry weight with substantive folk that matter because of his outstanding and relevant experience and perspective. 

I have to give National Journal's Tech daily and Senate Commerce Committee Chairman Ted Stevens (R-AK) the quote of the week award. In talking to reporters today after a brief visit to the PFF luncheon I attended today, Chairman Stevens had this to say about the Net neutrality supporters:

"There's no way you can appease the people" that support net neutrality, he said. "It's a fetish -- it's really something that doesn't exist. But they want to stop this bill because it might exist."

The recent high tech letter to Senate leaders against net neutrality is very helpful because it shows that many Silicon Valley and high tech companies also oppose preemptive net neutrality legislation.

This letter had a simple clear message: that no Internet regulation has been key to the Internet's success; that "correcting a nebulous concern many have severe unintended consequences"; and that net neutrality legislation could discourage investment  in broadband networks. 

My previous blog on how the "FCC auction seeds more competition," apparently rankled our opponents over at Public Knowledge who see a dark cloud on every competitive horizon. Harold Feld of Public Knowledge derisively spat all over the auction results in his blog because the new DBS consortium was outbid, it strengthened the existing four big telco wireless players and it let cable bid for spectrum. 

This clash of views is instructive because it highlights the huge philosophical divide between netcompetition forces and net neutrality proponents. Netcompetition-ers believe market forces/competition produce superior consumer and economic benefit than regulation does.

The FCC wireless broadband auction has concluded the largest and most successful auction of spectrum in U.S. history.

Why is this relevant to net neutrality? Proponents of NN argue that a broadband duopoly exists, stubbornly refusing to acknowlege that wireless broadband is a real competitor to DSL and cable modem. (They sound a lot like the same luddites who argued over the last ten years that cell phones would not be direct competitors to landlines. ...Have those folks noticed the precipitous decline in the availability of pay phones because 210 million americans have cell phones? Or did they know the fact that there are now more wireless users than wireline users and more wireless minutes than wireline minutes?)

Net neutrality is not a grass roots issue but a special interest and Washington Centric issue. SavetheInternet loves to claim this is a grassroots phenomenon and that because there is lots of blogging and e-petition signers that net neutrality is gaining momentum. Malarkey!

Two points of evidence strongly suggest that net neutrality is a special interest driven issue and not a grassroots groundswell.

First is the new bipartisan poll conducted by Democratic firm Glover Park and Republican Public Opinion Strategies. It said that only 7% of those polled had ever heard or seen anything on the issue net neutrality!

Verne Kpytoff of The San Francisco Chronicle has a precious article today about how "SF is stalling WiFi, Google Executive Charges."

It appears that Google Exec Chris Saaca, who oversees the Google/Earthlink contract to provide the City of San Francisco with free WiFi service, is complaining to the Chronicle that the city expects Google to share its ad revenue with the City and give them free laptops and other goodies in return for winning the WiFi contract. Apparently "free" WiFi service is not cheap enough for the "progressive" City of San Francisco.