December 2010

Level 3's bogus claim that longstanding Internet peering arrangements are now somehow a Comcast "toll booth" (at the very moment the FCC is proposing net neutrality rules), exposes the real hidden agenda behind many who claim to want net neutrality and an open Internet -- and that's the expectation of a free lunch.

Unlike the consensus around a net neutrality principle, which means no anti-competitive blocking of content or applications of a users' choosing, or no unreasonable discrimination, there is fierce controversy and opposition to unwarranted, unjustified and uneconomic Title II Internet regulation, where Government forces some to absorb the network costs legitimately created by others.

FreePress and the Open Internet Coalition are criticizing the FCC Chairman's proposed Title I approach as fake or not "real net neutrality."

• What is now clear for everyone to see is that FreePress and the Open Internet Coalition don't want protection from a problem they know doesn't exist, what they really want is a permanent free lunch paid by anyone but them.

Netflix is the quintessential example of this entitlement uneconomics view of the Title II Internet regulation crowd.

Julian Assange's likely-criminal dissemination of many nations' secret national security information via Wikileaks --  in posting secret, proprietary, and private information that clearly endangers lives, diplomacy and peace -- has exposed one of the darkest sides of the broad open Internet movement, which pushes radical transparency, and general disrespect for secrets, confidentiality, privacy, and intellectual property -- to varying degrees.

• Assange tries to justify his reckless, irresponsible and destructive acts by claiming to "Keep Governments Open," without bothering to explain the problem his destructive acts are supposed to solve.

It ironic that the Open Internet Coalition is lobbying the FCC hard now to have the Government force Title II telecom utility regulation on private competitive broadband companies in the name of "openness" -- when there is no identifiable or proven problem to solve.

It is especially ironic that leading corporate proponents of the Open Internet Coalition have been so slow to condemn the obvious harm and criminality of Assange's destructive "open" Wikileaks, but are so quick to condemn competitive broadband companies for not being "open" enough -- when the coalition's  definition of "open" is fluid, and when the coalition has no evidence that broadband providers are not being "open."

If it is now so clear that Assange's Wikileaks are a serious problem, why did it take three massive wikileaks over a period of several months for Open Internet member:

The extent to which Level 3's business is underwater is the untold story behind Level 3's regulatory "hail Mary" claim that its Internet peering dispute with Comcast is somehow a net neutrality violation.

• Apparently Level 3 has concluded that since it hasn't found a straight-up way to compete successfully in the Internet marketplace on its own, it wants an Internet regulation bailout from the FCC, in which the FCC would: deem Level 3 a market winner; price regulate the Internet for the first time; and force its competitors to implicitly subsidize Level 3 with mandated Internet peering price subsidies.
  • (To appreciate how bogus Level 3's claims are, click here for a complete rebuttal.)

Why is Level 3 seeking a de facto Internet regulation bailout from the FCC?

First, Level 3 is a financially-sinking business with no legitimate growth prospects.

Now we know what "real net neutrality" and "openness" are, and that they are the antithesis of free market economics or competition.

As the FreePress-led letter to the FCC made clear on Friday: "Paid prioritization is the antithesis of openness. Any framework that does not prohibit such economic discrimination arrangements is not real net neutrality."

What is "paid prioritization?"

• It is quality of service guarantees, market economics, supply and demand, market-based pricing, investment incentives, competitive differentiation, and reasonable network management.
• Now we know "real network neutrality" and "openness" is more uneconomics from FreePress and the extreme left.

Remember FreePress' last Uneconomics 101 lesson was that "above-cost pricing" was an "unfair business practice."