Net Neutrality

You can’t make this stuff up.

Asymmetric Realities: The five most valuable companies – Apple $802b, Alphabet-Google $688b, Microsoft $585b, Facebook $500b, and Amazon $475b – are together worth an unprecedented $3 trillion and widely-appreciated to be dominant in the communications-driven businesses of smartphones, search advertising, subscription business productivity software, social advertising, and ecommerce platform services respectively.

In Washington’s theater of the absurd, these well-known, winner-take-all platforms, are playing the role of victims of potential harms, that supposedly can’t afford to shoulder the potential risks for the potential net neutrality problems that they allege are potentially serious, when they produce $131b annually in free cash flow and have $357b in cash (mostly overseas).

Online-offline asymmetric regulation is the biggest persistent competition problem in the economy for the next decade. 

Asymmetric commercial treatment by the Government predictably produces asymmetric market outcomes. Everyone knows how an unfair playing field or unfair rules of the game produce favored winners and disfavored losers.

Internet myth is that Google, Facebook, Amazon, Uber, Airbnb, and their “intermedia” Internet Association brethren deserve to be winner-take-all because they are more innovative and better for consumers than offline companies.

The reality is that these companies common “winner-take-all special sauce” is old-fashioned regulatory arbitrage, of its special Section 230 intermediary immunity from liability, regulation, and accountability.

To date, the intermedia’s decade-long, bankrolling and public leadership of the Title II net neutrality regulation of broadband effort, has been a spectacularly effective diversion of public and government attention from the intermedia’s regulatory arbitrage of their winner-take-all, asymmetric regulation advantages.

iHypocrisy?

After fourteen years of diligently dodging any public position on net neutrality on principle, while operating the largest non-neutral, non-free, non-open, Internet network of smart devices on the planet, Apple Inc. is now taking a “principled” public position for net neutrality, and a free and open Internet, because Apple now tells the FCC in its net neutrality public comments that Apple now believes in the principles of consumer choice, no paid fast lanes, transparency, competition, investment, and innovation. iHypocrisy.

Let me be crystal clear here.

I am a longtime iPhone user and big Apple fan. I have long publicly defended their freedom to maximize the value of their patented innovations and property-rights driven business model and value creation strategy. I strongly defend their right to free speech and their right to reverse their “principled” position when their business needs warrant it, like wanting to save money on bandwidth for Apple’s new streaming services because it is losing money on streaming now that it invested a billion dollars in new video content over the last few months.

SUMMARY:

In 2015, the FCC’s Title II Open Internet broadband order was predicated on a demonstrably false central competitive premise: that the Internet’s edge was competitive while the broadband Internet core was not competitive. The facts prove the opposite.

The 2015 FCC’s competition premise is myth.

While there is plenty of information in the record, and in the July 17 comments, that broadband is  competitive, until now there has been little data and research on the overall competitiveness of the Internet edge providers, save for NetCompetition’s July 17^th comments that showed how concentrated the Internet edge is using the Internet Association as a proxy.

To further rebut comments that were predicated on the demonstrably false central premise that the Internet’s edge is competitive, NetCompetition submits additional Internet competition research below.

July 17, 2017

FCC Restoring Internet Freedom WC No. 17-108

Submission by Scott Cleland, Chairman, NetCompetition (An e-forum supported by broadband interests.)

Debunking Edge Competition Premises in FCC 2015 Title II Broadband Order – FCC Comments

In 2015, the FCC’s Title II Open Internet broadband order implicitly was based on three core competitive premises about “edge” competition and competitors, that are demonstrably false, which undermines the factual legitimacy and legal justification of the FCC’s 2015 Open Internet order, and which supports the current FCC’s Restoring Internet Freedom NPRM to overturn it.

Summary: The 2015 FCC’s three demonstrably false core competitive premises are:

Ironically, the world’s leading winner-take-all Internet platforms -- Google, Amazon, and Facebook -- are the leading voices of the July 12th “Internet-wide Day of Action to Save Net Neutrality.” They want to pressure the U.S. FCC to maximally regulate ISPs as Title II telephone utilities, even though they don’t believe in operating neutral networks themselves.

Even more ironic, is this 1 min. Google-YouTube video -- by the Internet Association, “the unified voice of the Internet economy.” It defines net neutrality and what it wants the FCC to ban ISPs from doing. However, those banned behaviors closely describe how Google, Facebook and Amazon often operate. Awkward.

In yet another video supporting this Day of Action, three U.S. Senators video message said: “We believe the Internet is the extraordinary opportunity that gives everybody in America the chance to get ahead. We have to make sure it is not controlled by a handful of powerful corporations.”

This piece has two tasks.

If proponents of network neutrality, an Internet non-discrimination principle, truly care about preventing discrimination on the Internet, why do they turn a blind eye to the worst offender of gatekeeper discrimination on the Internet – Alphabet-Google?

Recently, the Internet Association, which Google co-founded and funds, criticized the Federal Communications Commission for its proposal on network neutrality and utility regulation of Internet Service Providers (ISPs). Internet Association President Michael Beckerman stated: “ISPs should not be able to use their position as gatekeepers to prioritize their own content over others.”

Apparently, the net neutrality movement has a hypocritical double standard on gatekeeper discrimination. It has one for their chosen opponents – ISPs, and another for their allies and patrons like Google.

They maximally regulate competitive ISPs as monopolies engaged in anti-competitive discrimination, when they are not on both counts. They stay silent and do nothing when a real monopoly anti-competitively discriminates.

How can net neutrality proponents be so incensed about an imagined ISP net neutrality problem and so indifferent to a real anti-competitive and discriminatory gatekeeper problem on the Internet – Google?

They must ignore the facts.

FOR IMMEDIATE RELEASE, May 18, 2017, Contact:  Scott Cleland 703-217-2407

What’s Wrong with This Picture? Pressure Groups and their Netopolies-Funders: Google, Facebook and Amazon, Hypocritically Demand Utility Regulation of Competitive Broadband ISPs to Prevent Commercial Discrimination or Blocking When the Netopolies are the Actual De Facto Utilities that Discriminate and Block as a Key Part their Business Models  

WASHINGTON D.C. – The following may be attributed to Scott Cleland, Chairman of NetCompetition:  

“Title II broadband regulation proponents sacrifice their credibility when they claim competitive companies are monopolies that require the strongest possible utility regulation, while simultaneously claiming Internet monopolies like Google, Facebook and Amazon, are competitive companies that should have no regulation at all.”

Please don’t miss my latest The Hill Op-ed: “HBO’s John Oliver needs a 'net neutrality' reality check.”

Please don’t miss my latest The Hill Op-ed: “Internet giants, not broadband providers, are the top threat to consumers”.