Comcast

Contrary to conventional wisdom, the FCC's order on Comcast's network management practices, reined in the net neutrality movement much more than it advanced their agenda.

• The old adage is true here, be careful what you ask for -- FreePress/Public Knowledge. 

At its rawest level, the chest-beating petitioners got the FCC to: reiterate what the FCC has long said it would do, and also order Comcast to do what Comcast already publicly committed to do.

• When the dust settles and the rhetoric cools, the petitioners will better understand the old adage: be careful what you ask for.
• In this instance, they hoped to advance their agenda for sweeping net neutrality legislation and regulation, and what they ended up with was the expert agency taking much of the wind out of their sails. 

How does the FCC Comcast decision limit Net Neutrality?

First, the petition proved the existing system/process works -- seriously undermining any legitimate rationale for new net neutrality legislation or regulation. (Unfortunately, for the neutralists, the public takeaway from the resolution of this petition was not that legislation is needed, but that there is a government process in place more than able to handle consumers' concerns.)  

What did we learn from today's FCC action on the FreePress-Comcast dispute? 

First, there remains no need for passage of net neutrality legislation, as an FCC majority showed that there is an oversight process in place and readily available to address anyone's concerns about maintaining consumers' right to "access the lawful Internet content of their choice."  

Second, the absence of any fine against Comcast, the lack of any finding of anti-competitive intent by Comcast, and the FCC acceptance of Comcast's self-imposed deadline to address the FCC's concerns --speaks volumes. 

• Basically, the FCC is affirming the direction and actions that Comcast already has undertaken on its own, in dramatically increasing its terms-of-service disclosure and migrating to a protocol-agnostic network management technique by year end.    

Third, an enforcement process is the appropriate mechanism for determining what is "reasonable network management," not a regulatory rule or legislation.

Tim Wu's "OPEC 2.0" Op ed in the New York Times employs an embarrassingly inane analogy/metaphor. It also happens to be a factually bankrupt piece.  

Why is Professor Wu's political analogy comparing bandwidth to energy, and a "bandwidth cartel" to OPEC -- embarrassingly inane?

• The vast majority of people understand that the price of gas has increased dramatically in part because the U.S. government has severely restricted supply by banning a variety of energy supply alternatives.
• The vast majority of people also understand that the price of bandwidth usage continues to plummet in large part because the U.S. Government has NOT restricted supply; on the contrary, it has encouraged free market competition, broadband investment and innovation that in turn -- has spurred vastly more supply of bandwidth.

In his op ed Professor Wu said:  "In an information economy, the supply and price of bandwidth matters, in the way that oil prices matter: not just for gas stations, but for the whole economy."

The Wall Street Journal's editorial writers totally get the net neutrality issue.

• Be sure to read their excellent editorial: FCC.politics.gov.

They understand net neutrality is all about:

• Regulating the Internet;
• An industrial policy pushed by high-tech rivals Google and pro-regulation groups like Moveon.org and FreePress; and
• A slippery slope towards government intervention and political mischief.

They were also dead on in understanding that no good deed goes unpunished in Washington -- i.e. the FCC majority is concluding that it is not reasonable for Comcast to deliver quality of service for most all its customers by minorly affecting the available speeds of bandwidth hogs when they congest the network. Unbelievable.

Kudos to the Wall Street Journal's strong defense of free markets and the free-market Internet.

Peta-kudos to FCC Commisioner Robert McDowell for his spot-on Op Ed in the Washington Post warning against potential Internet micromanagement by the FCC in: "Who should solve this Internet crisis?"

Commissioner McDowell's sage analysis gets right to the crux of the net neutrality debate: the Internet's genius is that free people in a free market process of voluntary collaboration are best positioned to solve the Internet's ever-changing operational and engineering problems and challenges -- NOT the FCC  with bureaucratic engineering, "Mother-may-I" regulation, and over-reaching governmental coercion.  

Commissioner McDowell understands the policy choice: support a path of Internet collaboration or net regulation.

• Departing from the extremely successful, bipartisan, free-market Internet approach enshrined in law since 1996, threatens to encourage a new regulatory activist approach around the world that could "balkanize" the Internet and ultimately undermine its free, open and universal essence.   

Commissioner McDowell is right to warn that the Internet "would certainly die of clogged arteries if network owners had to seek government permission before serving their customers by managing surges of information flow."

A recent study by the Leichtman Group found 70% of American broadband subscribers are very satisfied with their service, and relatively few are actually seeking faster Internet access.

• This suggests the drumbeat for a national broadband industrial policy, because America's Internet is too slow and falling behind the rest of the world, is just empty rhetoric and wishful assertions by Big Government types.
• As I have blogged before, the facts are not the friends of those screaming for de facto nationalizing the Internet.  

Bottom line:  The more one learns about the facts about what benefits American broadband consumers actually enjoy, and what they demand in the future, it is not what the Big Government folks claim.  

The FCC is reportedly considering putting "the burden on the network operator to prove that its network practices are reasonable" in its net neutrality proceeding on Comcast's network management, according to today's top story in Washington Internet Daily.

• Assuming that this report is accurate, and assuming that an FCC majority would approve such a shift of the burden of proof, let me explain why such an FCC ruling would be a profound assault on the freedoms that Americans hold most dear.   

It would be supreme irony, if in the supposed name of "Internet Freedom," the FCC somehow ruled that network operators had no freedom to manage their private property, enter into contracts or pursue business without prior permission from the FCC.

• Freedom from Government is central to the U.S. Declaration of Independence which declares "certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness." 
• The Fifth Amendment of the U.S. Constitution guarantees the presumption of innocence: No person shall "be deprived of life, liberty, or property, without due process of law."   

Why would it be bad to put "the burden on the network operator to prove that its network practices are reasonable"?

Today's announcement by Vonage, the independent VOIP leader, who is collaborating with Comcast to address reasonable network management of Internet services, is more tangible and compelling evidence that market forces continue to work well in meeting consumers needs -- and that there is no market failure for the FCC to address with stifling net neutrality regulation.

The Internet has thrived because of Congress' wise bipartisan Internet policy set into law in 1996: "It is the policy of the United States to preserve the vibrant and competitive free market that presently exists for the Internet..., unfettered by Federal or State regulation."  

The FCC needs to continue to:

• Excercise regulatory humility, patience, restraint, and common sense in letting free market forces continue to best meet consumers diverse and dynamic needs; and 
• Encourage industry to collaborate and innovate to produce technological and practical solutions that best serve everyone involved in the Internet.

The Internet has proven to be the greatest de-regulation success story of all time. 

• This is no time for the FCC to snatch defeat from the jaws of victory with new net regulation.   

I wrote the anti-net neutrality argument and Professor Lowell Feldman wrote the pro-net neutrality argument for the ABI Telecom Technology Committee newsletter this month for the American Bankruptcy Institute:

Both articles are copied below, mine followed by Professor Feldman's:

Why Net Neutrality is Unnecessary and Bad Policy

Written by:

Scott Cleland

Chairman, NetCompetition.org -- a net neutrality forum funded by broadband companies Washington D.C.

The reality of market pricing for Internet usage is naturally gaining more attention.  

• The New York Time's had an informative Sunday page one story: "Charging by the Byte to curb Internet traffic." 
• Today the Wall Street Journal highlighted why market pricing for Internet usage is evolving with dramatic changes in the Internet marketplace in its story today: "Cisco projects growth to swell for online video."  

The big economic takeaway here is that in a free market Internet, where users have very different demand: i.e. needs, wants and means for speed, usage, mobility, latency, immediacy, reliablity, flexibility and other attributes -- suppliers (ISPs, application providers and content providers) must have the freedom to innovate, experiment and provide a diversity of choices, at a diversity of prices in order to meet the diversity of demand from users.

The big political takeaway here is that Internet "fairness" is not legislated/regulated net neutrality or a one-tier Internet where all bits must be treated the same and where light Internet bandwidth users must subsidize heavy Internet users -- but real and practical Internet fairness comes from users paying their way, paying for what they use above a certain amount and not expecting others to subsidize one's extreme bandwidth usage.