Congress

The common theme of net neutrality supporters is that there is not enough competition or competitive forces to prevent discrimination.

They assert a broadband duopoly even though the evidence and data don't support their assertions. This is one of the main reasons net neutrality has had so little success in forums where substance, evidence and proof matter.  

Last week at the FTC workshop, Amazon and eBay took this competitive discussion to a whole new level of la la land.

• Both Paul Misener of Amazon and Tod Cohen of eBay agreed on their second day panel that competition won't solve this potential problem.
• Tod Cohen of eBay said that even if their were 4-5 competitors in the broadband market there would still be an incentive to discriminate. 
• Wow. Now we really know what we are up against.
• Supposed capitalists, Amazon and eBay don't believe in or trust free markets any more!
• They are saying that Congress should pass a law regardless of how much broadband competition there is or will be. 
• This is classic industrial policy think, which is defeat your future competitors in Washington, while they are still in the crib.  
• It is also more predatory than anything any broadband provider has done.
• Under their logic all duopolies should be regulated preemptively before they do the things that all businesses have deep lurking in their hearts -- make profits...
• Then the government should rugulate the Intel-AMD chip duopoly, the Microsoft operating system monopoly, the Cisco-Juniper router duopoly, the Google-Yahoo search duopoly, the Giant Foods- Safeway grocery duopoly and while they are at it they could preemptively regulate the eBay-Amazon retail ecommerce duopoly!

Amazon and eBay are no longer for free markets, but for Big Government industrial policy and European style socialism with them as the designated online national champions.  

It looks like some national net neutrality proponents groups have suckered some well-intentioned, but unsuspecting Maryland delegates into sacraficing Maryland consumers as pawns in their national chess strategy over net neutrality. Maryland consumers deserve much better.

• Twenty three Maryland delegates have proposed bill HB 1069, a bill which would regulate the Internet access of DSL, cable modems, wireless broadband, and BPL; would impose net neutrality only in Maryland; and would require detailed quarterly reporting of broadband deployment in Maryland.  

I'll bet the national activists that sold this fraudulent bill of goods to the unsuspecting state delegates, only told their unsubstantiated side of the story -- ill serving Maryland consumers and lawmakers in the process.

Qualcomm's MediaFlo subsidiary has a network innovation and will soon have a commercial offering that will make it  easier to broadcast TV content to mobile phones.

• Investors Business Daily reported February 13, in an article "Qualcomm's Mobile TV Network wins AT&T's Nod," that both AT&T and Verizon plan to use the MediaFlo service for their subscribers rather than the competitive offerings of Crown Castle or Aloha Systems.

Qualcomm reportedly is spending about $800m in risk capital to gain spectrum and build a mobile broadcast network for cellphones that will be able to reach about 100 million potential users in the U.S. by mid-year.

The Wall Street Journal's lead editorial today: "Broadband Breakout" once again proves that they have a very knowlegable and sophisitcated understanding of the successes of broadband competition, deregulation, and competition and of the risks of "net neutrality" or Internet regulation 

The Journal also picked up the point I made here in a previous blog that you have to look at the trajectory of competition, is it increasing?

Tim Karr, the campaign director of Free Press that runs much of the SaveTheInternet effort, blogged a personal attack on me today, that I responded to on his blog.

• I include the full text of my response below in case Mr. Karr is not willing to post my comment on his blog.

Tim,

It's not the first time I've been called names by people who wanted to discredit me and my analysis. Among others, you share the august company of the now-imprisoned Bernie Ebbers, who routinely derided me as the "idiot analyst" because I had his number in calling WorldCom "dead model walking" before anyone else in the country figured it out. He too was mistaken that name calling and intimidation could muzzle my views.

Overall I think the FTC has done a pretty good job of presenting a balanced view of the net neutrality issue.  I commend them for calling the workshop "broadband connectivity competition policy." That is what the issue is all about-- in generic non-loaded terminology.

To be brief, I will highlight just what I thought was most noteworthy.

The distinguished practioner and academic, Fred Kahn, is always a joy to learn from. Besides making his main point that government should resist its propensity to meddle he was particularly critical of many people's use of the term "discrimination." As an economist, he was frustrated that people were using the term discriminatory just if it was differential. For those that don't know or understand economics or competition policy, Mr. Kahn stated simply -- if there is opportunity cost involved, its not discriminatory. What he reminded people of is that there are lots of legitimate economic, functional, and consumer welfare reasons why service and prices can and should be different.

Alan Davidson of Google clearly took a different tack than usual. He further retreated trying to respin Google's grandiose vision of net neutrality to be more "reasonable." He gave Google's blessing to the Internet continuing like it is -- charging differently for different speeds. He also gave America Google's permission to continuing caching and stopping denial of service attacks on the Internet. Thank you Google for your permission, it means so much.

Alan Davidson of Google then went on to say that Google only has a very "small" problem with just "one type" of router discrimination -- trying to appear reasonable. Unfortunately, to anyone that uderstands networks and competiton, his "reasonable" approach is about as "reasonable" as a doctor telling a patient that all the parts of their body are healthy but that he just needs to remove their "small" cerebellum.

The evidence continues to mount from highly respected sources that Google's business model is aligned with and tolerant of promoting illegal activities.

• This blog post catalogues includes many articles highlighting this theme from:
•  the Wall Street Journal, the New York Times, The Washington Post, and Investors Business Daily among others.
• Where there is smoke there is usually fire.  

Today, if you want another high profile reminder that Google's business model is aligned with, and tolerant of, promoting illegal activities, go no further than Page One of TheWall Street Journal: "Media firms say Google benefited from film piracy." 

• Despite Google's infamous double-negative motto: "Don't be evil," apparently Google's salesforce and sales management actively sold ads to two sites that were actively involved in piracy of copyrighted material: EasyDownloadCenter.com and the DownloadPlace.com. 
• According to those familiar with the afadavits, Google went so far as to supply these sites with clearly problematic keywords like: "pirated" and "bootleg movie download."
• Can you say "complicit?"

This is just additional evidence that Google's entire business is aligned with doing whatever it takes to encourage clicks on their ads or their "keywords" because every such click is money to Google.

I was delighted to see Mark Goldberg's post alerting us in America that the Canadian Government is opposed to embracing net neutrality regulation as well.

I love Mark's no apologies free market stance. He knows the Internet's growth, vitality, and diversity has come from free citizens, freely interacting and cooperating, free of government intervention. As he said, let freedom reign!

This is more evidence that the rest of the world is not pro-net neutrality despite the balderdash NN proponents toss  around.  

Today's WSJ article: "MySpace pact with Google hits a snag" is a helpful reminder of the competition double standard and hypocrisy of net neutrality proponents Google and eBay.

Google the dominant search gatekeeper with 47% share and rising is the world's leading Internet access technology. They have a pact with Myspace, one of the fastest growing sites on the planet that would pay MySpace's News Corp. $900m for placing Google's search on MySpace.

• While this business practice is perfectly legal and above board, it is precisely the type of business arrangement that Google has outrageously mischaracterized as "discrimination" and is seeking to make illegal for its broadband competitors.

 Meanwhile, the pact is supposedly hung up because MySpace would still like to have a "discrimnation" deal with eBay too, where MySpace users could use post eBay auctions on their MySpace page. But Google only likes "discrimination" that is in its favor.

Listen to a priceless quote from the WSj article today:

• "Google isn't likely to favor any deal that promotes eBay services that compete with their own."
  • Yep that sums it up Google's real belief in "neutrality." 

How does Google explain their attempt to "block, degrade and impair" eBay's ability to easily reach Myspace consumers is not precisely the net neutrality "discrimination" problem that they want to ban?

I really enjoyed the Washington Post article today "Google still searching for recognition in DC."

• The Post article was some humble pie for Google:
• It opened by mentioning noone recognized the supposed celebrity Google CEO at the location of his one public speech;
• Then went on to retell the story of how Google founder Sergey Brin showed up in DC in jeans and tennies and couldn't get meetings on the Hill;
• And finally it concluded with a zinger of how a third of Schmidt's audience left during his talk.