Ebay

Google and eBay are planning to operate non-neutral broadband ISPs, Google at 47 airports, and eBay on airplanes, that will discriminate against some content for the benefit of their preferred content -- per a story on CNNMoney.com.

This puts the FCC in a pickle concerning its proposed open Internet regulations.

• First, it shows the ease for Google and eBay to enter and compete in the broadband market; where's the supposed market failure?
• Second, two of the biggest complainers seeking mandatory net neutrality regulations of broadband providers (including wireless for the first time) because of the potential for discrimination, are actually planning to engage in the very non-neutral broadband behavior that they want banned.

The open question is will the FCC be fair and technologically neutral in preserving the open Internet? 

• Or will Google and eBay get special treatment and protection from the FCC?

   

eBay is licking their chops at the prospect of the FCC's open Internet regulations locking in their dominance of:

• Online auctions (95% share); 
• P-2-P voiceware (via #1 Skype's ~500m users); 
• Classified ads ( #1 in revenues); and
• Online payments (via eBay's #1 PayPal).

Like Google, eBay knows that "openness" is industrial-policy-speak for:

• Rewarding favored "national champions" and
• Locking in first-mover and netopoly scale-and-scope-advantages.

The netopolists must be giddy at how they now have the full power of the FCC focused on permanently locking in their market dominance going forward. 

The FCC's claims that their proposed net neutrality regulations would just "preserve" the open Internet are simply not true. The facts are clear that the FCC's  proposed regulations would:

• Be a big change in FCC Internet policy; 
• Implement big Internet policy changes without Congressional authorization; and
• Change the Internet in big ways.
  • (The one-page PDF version of this post is here.)

The FCC’s proposed net neutrality regs are a big change in FCC Internet policy; they would:

Given that the apparent justification for new formal net neutrality rules is that fifteen-year policy has failed and that the market is unable to ensure consumer choice, the FCC will need to justify with facts that broadband providers indeed have market power to exercise anti-competitively.

Kudos to Larry Darby of the American Consumer Institute for his excellent and illuminating comparative financial analysis of the market power and profits of broadband companies vs. Internet companies. From his post: 

What an "Open Internet" does not mean is as important as what it does mean.

• Surely an "Open Internet" is not intended to mean what it certainly can mean: un-protected, unguarded, or vulnerable to attack. 


• Thus, it is essential for the FCC to be explicit in defining what the terms -- "Open Internet," "net neutrality," and Internet non-discrimination -- don't mean, as well as what they do mean.

The word "open" has 88 different definitions per Dictionary.com and the word "open" has even more different connotations depending on the context. While the term "open" generally has a positive connotation to mean un-restricted, accessible and available, it can also have a negative or problematic connotation if it means unprotected, unguarded or vulnerable to attack.  

With due to credit to "Ripley's Believe it or Not!^®," so much odd and bizarre is happening in Washington in the "name" of "wireless innovation" and competition that the topic calls for its own collection of: "Believe it or Not!^®" oddities.

Skype co-founder Niklas Zennstom, the co-founder of illegal-music-downloading site Kazaa, who had to avoid entering the U.S. because of copyright-infringement liability... is now seeking a U.S. court injunction to shut down eBay's Skype for alleged copyright violations!

Analysis of the potential pitfalls of wireless innovation regulation is a necessary complement to the FCC's upcoming Notice of Inquiries into wireless competition/innovation and the DOJ's review of wireless competition, in order to ensure policymakers get a balanced view of the big picture.  

What are the Top 10 Pitfalls of Wireless Innovation Regulation? 

#1 Pitfall: Losing focus on universal broadband access.

"Wireless innovation" appears to be the latest rebranding iteration of "net neutrality" and "open Internet" as the net neutrality movement searches for more mainstream support of their views. 

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.