In a stunningly naive, parochial, and innacurate opinion piece, "Keeping a lid on broadband," Computerworld national correspondent Kevin Mitchell has scathing criticism of current free market communications policies (that by the way were modeled after the computer sector's free market and innovation successes) and calls for government bureaucrats to regulate most everything of import in the communications sector.   

I am stunned that in the journalistic "world of computers" there could be such a naive and parochial view of the real-world ramifications of technological and digital convergence -- the rapidly blurring lines between computing, communications and storage. Mr. Mitchell writes like the tech sector and computing in general is an impregnable and immutable island that should forever be insulated and protected from competitive and market forces occuring outside the tech sector.

Remarks for the University of San Francisco Net Neutrality Symposium

January 26, 2008

Thank you for including me in this forum and debate on net neutrality.

• I have a very different point of view than most everyone on the panel save for Richard Bennett.
• Full disclosure, I am Chairman of NetCompetition.org which represents broadband companies on the issue of net neutrality.   

I believe net neutrality is largely a contrived issue and a fabricated “problem.”

·         The issue is on political life support in Washington, because it is all slogan and little substance.

The American Civil Liberties Union (ACLU) entered the fray on net neutrality yesterday in an important ACLU blogpost: "Free Speech and Net Neutrality: Separating fact from fiction."

While the ACLU predictably voiced strong POLITICAL support for net neutrality, the ACLU Blog surprisingly and effectively eviscerated the LEGAL and practical case for using the analogy that "Net Neutrality is the First Amendment of the Internet."

• ACLU blog: "At the same time, the First Amendment is not directly implicated because unlike the government, your ISP is not a traditional "state actor" — a requirement for triggering First Amendment cases."
  • Duh.
  • The ACLU makes plain what any junior high civics student knows -- that the First Amendment is there to prevent the Government from abridging individuals freedom of speech -- not companies or other individuals.
  • This badly flawed "First Amendment" analogy only highlights how net neutrality proponents are loose with the facts and analogies. 
    • The net neutrality movement is "all slogan and no substance."

Net neutrality is not about free speech. It's classic buzzword political blackmail. Proponents cynically believe that if they repeat the conspiracy theory that big corporations want to systematically take away their customers freedom of speech -- that some people will believe it.

Concern about an economic downturn has a powerful practical effect of rationalizing public policy priorities.

• Net neutrality proponents failed to persuade every official body in 2006 and 2007 to support net neutrality legislation/regulation, because most every responsible official could plainly see that net neutrality was a solution in search of a problem. 
• Now the net neutrality movement has re-focused its crusade on manufacturing and contriving a "problem" by focusing on FCC petitions against Comcast's network management of p2p and Verizon's admitted and quickly-corrected mistake concerning text messaging.   

The economic downturn now provides even more perspective of how far out of the mainstream the net neutrality movement really is.

We'll soon see if net neutrality proponents are reasonable and responsible. Do they grasp that calling for preemptive, anti-investment, regulation of broadband that would discourage deployment of broadband to all Americans -- is the last thing our Nation needs during this economic downturn?

• The reality is that forward-thinking broadband deregulation has spurred massive investment in broadband and Internet infrastructure in the U.S. and this investment is spurring adoption of broadband faster than any communication service in American history.
• Moreover, an unfettered broadband economy and infrastructure is key to capturing the economic and productivity gains of more universally-adopted broadband.

Broadband deployment, adoption, competition and investment is one of the great success stories of our economy.

• The last thing our teetering economy needs right now is preemptive, anti-investment, net neutrality regulation of our cutting-edge communications sector that would only hurt the overall American economy.
• This is no time for solutions in search of a problem.
• We face real economic problems which require responsible broadband policies.  

Network World has a great piece: "Open Access not as important to wireless consumers as QoS, pricing, survey finds" which exposes the Google-led tech industry's push for open access as a not-so-subtle tech-industrial policy.

• The survey by Compete, Inc. found:
  • Only 9% of wireless users did not believe they had enough options for handsets;
  • Only 11% of wireless users believe that their carrier offered them too little content and services to meet their needs;
  • In stark contrast, 93% of wireless users believe getting a phone at a reasonable price was either important or very important.

This survey is important evidence exposing the tech industry's attempt to pass net neutrality/open access legislation/regulation as an thinly-guised tech industrial policy.

• This tech industrial policy is asking the government to intervene and mandate engineering design and pass price-related regulations that would de facto choose tech companies as market winners and communications companies as market losers.

The tech industry has done a good job of cloaking their openness campaign as what consumers want most -- because that serves their Washington industrial policy agenda.

The big question for investors is why?

• Why has Google felt the need to rapidly build up a new lobbying operation in D.C. (rivaling Microsoft's in size) and why did Google just unveil, with great fanfare, its new cutting-edge office space in DC with a party that attracted 650 people and many VIPs?
  • What does Google know that investors may not?

Google's Regulatory Outlook:

Federal Trade Commission: 

Antitrust:

Time Warner Cable's announcement of a new high-usage, bandwidth-pricing trial in Beaumont Texas is a common-sense balanced approach to dealing with the problem of a few bandwidth hogs degrading the efficiency and responsiveness of Internet access for the rest of TWC's customers. 

• This is a common-sense, market-based solution to restoring the efficiency of the network for all users because about 5% of users are hogging as much as 50% of the network's total available bandwidth.
• This is a balanced approach because it is a limited trial/experiment of more tiered-pricing for super-heavy users, that will garner feedback from real customers and market test pricing discipline assumptions. 

Market solutions involving real world consumer feedback are always the best solution to addressing problems like this.

While I have been critical of the AP's coverage of net neutrality issues when I believe it was warranted, to be fair I have to acknowledge and highlight AP coverage of net neutrality that's straightforward and fair.

• Today, the AP reported: "Agency Urges Caution on Net Neutrality"  

  • "Federal Trade Commission Chairman "Deborah Platt Majoras said policymakers should proceed cautiously on the issue of "net neutrality," which is the notion that all online traffic should be treated equally by Internet service providers... In separate remarks before a lawyers' group Wednesday, Majoras said the agency was unaware of any market failure or consumer harm in the high-speed Internet market, according to a written copy of her speech.""

The AP is a fine and widely respected news organization that best serves its readers and reputation when it fulfills its mission.

• "AP's mission is to be the essential global news network, providing distinctive news services of the highest quality, reliability and objectivity with reports that are accurate, balanced and informed."

I commend the new consumergram by the American Consumer Institute on: "With increased competition, US consumers exert their power over wireless providers." 

• Its a timely overview of all the benefits that US wireless consumers enjoy as a result of the US having arguably the most competitive wireless market in the world.

You wouldn't know that if you only listened to the many wireless and America bashers, organized by Google and the New American Foundation, who are gathering for a wireless/America bash-fest on Capitol Hill next week, January 22nd, called "Free my phone!"