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August 2009

Taking one's business elsewhere -- what a concept! TechCrunch's Arrington proves competition works

Sometimes the simplest solution can somehow elude people for a period of time.

  • After long pushing hard for net neutrality legislation and wireless net neutrality regulation, TechCrunch's Michael Arrington, finally had an epiphany and figured out that he could become a fully satisfied consumer by simply choosing to take his business elsewhere -- from the AT&T Apple iPhone to the T-Mobile Google Android mytouch 3G phone. 

Competitive differentiated choice -- what a concept -- why didn't anyone think of this before?

  • Consumers that value and want different things... can shop around and find what they want from different providers.
  • Amazing. People don't have to lobby Congress, petition the FCC, or instigate an antitrust review -- they can simply vote with their feet and take their business to a provider that sells what they want.
  • And even better with this competitive choice thingy going on, if a consumer decides they want something new or different in the future they can get it without having to wait for the government to figure out whether or not  they should force all providers to provide it.

Mr. Arrington's epiphany -- that robust wireless and broadband competition not only exists, but actually works very well -- is a powerful reminder that the first and best solution for consumers is not regulation, but to simply to choose to take their business elsewhere. 

The Open Internet's Growing Security Problem -- Part XV

Evidence of the Open Internet's growing security problem only continues to mount. There also appears to be a growing and troubling disconnect between the seriousness of the actual problem and the seriousness of attention paid to the growing Internet security problem.  

  • For example, despite President Obama making cybersecurity a national security priority in his cybersecurity address 5-29-09, none of the FCC's 18 currently planned public workshops designed to help develop a National Broadband Plan are on cybersecurity.   

"Twitter, Facebook Sites Disrupted by Web AttackWSJ

  • "Multiple Internet sites, including popular hangouts Twitter and Facebook, were temporarily disrupted Thursday after they were struck by apparently coordinated computer attacks..."
  • "The companies traced the problem to what the computer industry calls "denial-of-service" attacks, which are designed to make sites inaccessible by overwhelming them with a flood of traffic. Though such attacks are fairly routine, simultaneous action against multiple consumer Internet companies is rare."

"Most users clueless about cybersecurity, FBI says" PC World

Does new Government cookie policy favor publicacy over privacy? Part XIII -- Privacy-Publicacy Series

The U.S. Government is relatively quietly proposing a major change in its online privacy policy from a Government ban on Government using "cookies" to track citizens' use of U.S. Government websites to allowing the Government to track some citizen online behavior with some restrictions.

This policy shift is a quintessential example of the shift away from a default expectation of online privacy, to the default "publicacy" approach increasingly taken by many web 2.0 entities.

  • ("Publicacy" is the opposite of privacy. "Publicacy" also describes the Web 2.0 movement that seeks to have transparency largely supplant privacy online.) 

I have written about the growing tension between privacy and publicacy thirteen times this year, because I believe it is one of the biggest changes that is occurring online that average users are not aware of, but should be. 

Why proposed net neutrality bill is the most extreme yet

While the latest net neutrality bill introduced in Congress has no chance of passage as drafted, it is a bay window view into how extreme the net neutrality movement has become and into what they are seeking from the FCC via backdoor regulation.

Why is this bill the most extreme version of net neutrality yet?

First, it is a completely unworkable framework.

  • It imposes a beyond-all-reason, effective absolute ban on prioritization of data traffic, essentially eliminating current essential network management flexibility to: protect networks from attack or malware; ensure quality of service; manage congestion, latency, and jitter; and handle unforeseen or emergency situations. Sections: 12(b)(5), 12(b)(6)

  • For all practical purposes, it destroys most any private sector incentive or benefit from competing or investing in broadband by outlawing any pricing/business model differentiation/innovation beyond commodity end user pricing. Section 12(b)(2)

Why Security is Google's Achilles Heel -- Part IV

It is interesting that since I started this series spotlighting that security is and has been, for all practical and official purposes, a low corporate priority for Google, a Googler now publicly claims: "for Google, there is no higher priority than the safety and security of our users."

  • This new public claim was made as part of a press release announcing that Google has joined the board of the National Cyber Security Alliance
  • While I commend Google for joining the National Cyber Security Alliance, it is telling that none of the relevant official Google corporate links, indicate that security is a high priority for Google: check "Our Philosophy -- Ten Things," "Design Principles," or even "Google's Security Philosophy." 
  • We will know when Google makes security a high priority when they actually walk the talk and when their official representation of their corporate priorities (in the main corporate links above) reflect that security has truly become a new higher priority for Google. 

This new claim and development presents a useful opportunity to evaluate Google's stated security philosophy.   

Google: Antitrust's Pinocchio?

First, antitrust's modern day Pinocchio claimed that competition is just "one click away," now Google is claiming that the notion that scale is important to search competition is "bogus."

  • Google's Chief Economist, Hal Varian is pushing a preposterous, self-serving argument in CNET that scale is not important to search competition:
    • "...the scale arguments are pretty bogus in our view because it's not the quantity or quality of the ingredients that make a difference, it's the recipes. We think we're where we are today because we've got better recipes...  I also think we have a better kitchen..."

Why is Google's "bogus" claim bogus?

First, does Google think for a minute that antitrust enforcers' investigations have not assembled substantial evidence/quotes from Google itself about the importance of scale in search?

Do what they say, not what they do...

Vint Cerf, Google's Internet Evangelist, urged the FCC at a broadband workshop last week to regulate broadband networks as a utility like the electrical grid.

  • I wonder if others spotted the irony in Google's "utility" regulation prescription for broadband.

Google's Mr. Cerf looks at the most competitive broadband market in the world, declares it inherently anti-competitive, and summarily prescribes... monopoly utility regulation for the entire broadband industry.

Meanwhile back at the Google Book Settlement ranch... Google has negotiated a de facto book search monopoly for itself in the Book Registry "utility" of the Google Book Settlement, without any regulation or Government oversight.  

Why Broadband is Not a Public Utility

The data and evidence show that broadband is not a public utility warranting economic regulation of prices, terms and conditions; this is contrary to the assertions of net neutrality proponents: the Markey-Eshoo Bill, FreePress, the Open Internet Coalition, and Google's Internet Evangelist Vint Cerf, among others.

Why is broadband not a public utility? 

First, it is a competitive service, not a natural monopoly service.

A public utility presumes "natural monopoly" economics where economies of scale and scope preclude the possibility of competitive facilities/services. 

  • The roughly $200b in private risk capital invested in financially-successful U.S. competitive broadband facilities over the last several years is incontrovertible evidence that broadband does not enjoy natural monopoly economics.

Second, users have choice of access providers.

Will National Broadband Plan Address Cybersecurity? Part XVI : Open Internet's Growing Security Problem

The lead WSJ story today, "Arrest in Epic Cyber Swindle" covering the cybercrime ring theft of over 130 million credit/debit cards, is a stark high-profile reminder of the very real and pervasive Internet problem of lack of cybersecurity. 

  • In the face of overwhelming mainstream evidence that lack of cybersecurity is the Internet's #1 problem (see links below), including President Obama's declaration that cybersecurity must be a new national security priority in his 5-29 cybersecurity address, it is perplexing that none of the FCC's National Broadband Plan workshops are on cybersecurity. 
  • It is hard to see how the Open Internet's growing security problem can be addressed and mitigated over time, if the U.S. Government's main big picture policy effort addressing the broadband Internet, the National Broadband Plan, does not even collect input from the public or experts on the Internet's #1 problem -- lack of cybersecurity.
  • The first step in solving a big problem is acknowledging there is one. 


Kudos to an Insightful Post on Innovation/Internet's Evolution

Kudos to Link Hoewing's insightful post on "The Internet's Evolution and Network Management" on Verizon's Policy Blog.  

  • Its an important analysis and perspective for anyone wanting to understand how FCC regulation of the Internet and network management could negatively and seriously harm innovation and the Internet's natural evolution.


Q&A One Pager Debunking Net Neutrality Myths