March 2007

A new net neutrality study by an associate professor of the Business School of the University of Florida, bases its entire approach and conclusions on two embarassingly and obviously wrong pillar assumptions. 

• They have wasted a lot of people's time by not grounding their game theory model on solid ground, but on the quicksand of erroneous assumptions. 

What assumptions did they get wrong? and what is the big deal?

• The first pillar assumption they got dead wrong can be found in the first sentence of the abstract of their paper: "The Debate on Net Neutrality: A Policy Perspective"
•  "Whether to legislate to maintain "net neutrality", the current status quo of prohibiting broadband service providers from charging online websites for preferential access to their residential and commercial customers, has become a subject under fierce debate."
• Hello? The authors don't even know what the status quo is!
• Why would net neutrality proponents be lobbying for new legislation, if NN was currenlty the law of the land?
• Obviously these "researchers" did no research becuase if they did they would know that the ~30 million cable modems users have never been subject to net neutrality rules and that the ~225 million wireless users have  not been subject to them since 1993!
• With a just a teensy amount of research they would have discovered a little Supreme Court case called "Brand X" in summer of 2005 which declared that the FCC had the authority to not apply NN-like rules to DSL. The FCC then referenced that decision a few weeks later in formally rule that DSL was an info service not subject to common carrier-like NN rules.
• The second pillar assumption they got dead wrong was again in their first sentence in their conclusion section on page 29.
• "The absence of meaningful competition in providing broadband access to consumers in many areas of the United States makes the broadband provider a de facto monopolist, and therefore the sole gatekeeper in determining what content gets to the end consumer, and in what fashion."
• Obviously these "researchers" did no research at all, because no credible source argues that broadband is a monopoly in the United States. 
• The FCC's latest broadband competition report, shows that cable has 44% share, DSL, 36% share and wireless and other have 20% share. It also shows that in the latest reporting period, first half of 2006, wireless broadband represented 58% of all new high speed additions.
• That FCC report also showed that: 96% of U.S. zip codes that have at least 2 broadband providers; and 87% of U.S. zip codes that have at least 3 broadband providers.
• If the researchers only turned on their TVs or radios, or read a local newspaper, they would see competing ads for broadband offerings. I guess their are no windows in the University of Florida's "Ivory Tower."

• Even those most-in-denial-of-the-facts in the NN movement claim a "duopoly" and know better than to assert that the current market is a "de facto monopoly." If they did they would lose any remaining credibility they have.
• Many professors would fail a graduate student that made such careless and completely unsupportable core assertions to support their model and conclusions.

Lastly, when I was reading this embarrassingly-poorly researched and constructed paper, the image that came to mind was that of the great late commediene, Gilda Radner, playing one of the most famous characters of Saturday Night Live:  "Rosanna Rosanna Danna."

The WSJ is reporting that Viacom has sued Google for $1b in damages for stealing its copyrighted content.

• "YouTube is a significant, for-profit organization that has built a lucrative business out of exploiting the devotion of fans to others' creative works in order to enrich itself and its corporate parent Google," Viacom said in a press release. "Their business model, which is based on building traffic and selling advertising off of unlicensed content, is clearly illegal and is in obvious conflict with copyright laws."

I read with interest and amusement Drew Clark's piece on GigaOM about "Is Google changing its position on Net neutrality?".

• Its a similar take to my recent blog post: "Does Google really mean what they say? Is Google backpedaling on NN?"
• My key point is what is Google's official position on Dorgan-Snowe, the highest profile Net neutrality bill which is co-sponsored by Democratic Presidential Candidates: Senators Clinton and Obama?
• That is what matters. The rest is just backchatter, interesting though it is.

Drew Clark's piece in GigaOM is one of the better reports I've seen outlining the increasing disarray of the ItsOurNet coalition, the front group for online giants promoting net neutrality legislation.

Google has no sense of when to keep their mouth shut, because their corporate arrogance and cluelessness appears boundless. 

I could only shake my head at the headline in Comm Daily today prompted by a Google official speaking at a Washington conference.

• "Internet, Google will Sway 2008 Elections: Company Executive" (p.4 Communications Daily 3-16-07)
• "Google sees itself as a force in a political race that could hinge on making the best of Web and other tools, Google Vp-Global Communications Elliot Schrage said Thurs. at the Politics Online conference in Washington."
• "Candidates are starting to see the Web's power, Schrage said: "Already candidates and campaigns are spending tens of thousands on adwords campaigns alone." The company invited declared Presidential candidates to its offices to "talk technology and policy" and will post videos of the talks if candidates permit it, he said. Google is trying to "make services easier to use" through a "special sales and political team dedicated to helping political camps, he said."" 

Generally company's are more responsible and circumspect about bragging about their own company's ability to influence or "sway" and election. The U.S. Government takes Federal Election laws seriously and is attuned to ensuring the electoral process is not manipulated in any way.