Comcast

I wanted to follow up and build upon my post of last week: "The logic of Internet Pricing Diversity and the Fantasy of free limitless bandwidth."

•  I keep hearing this backward-looking refrain from net neutrality proponents that because some people characterize dial-up and early broadband bandwidth as unlimited or as an all-you-can-eat usage model -- that that model should never evolve or change.
  • Balderdash! This is some people's wishes being presented as analysis.

I believe U.S. Internet access consumers have come to understand at least two truths: 

The free market Internet works. Both Time Warner Cable and Comcast are logically and naturally experimenting with free market solutions to address increasing network congestion problems that threaten quality of service, because of extremely high and disproportionate bandwidth usage by a small slice of the broadband population. 

• As widely reported, Time Warner Cable is experimenting in Beaumont Texas with a commercial offering that provides consumers with a range of choices based on their bandwidth consumption and desired speed, and includes a new $1 per gigabyte charge for usage above a plan's monthly limit. 
• Also widely reported, Comcast is testing in Chambersburg PA and Warrenton VA, a protocol-agnostic network management approach which would potentially delay all of the traffic of extremely heavy users during periods of serious network congestion -- in order to maintain quality of service for everyone.

Free market experimentation is the best, fastest and most efficient finder of solutions to complex difficult problems.

Free market competition produces a diversity of choices for consumers, which is essential because consumers have a diversity of wants, needs and means. A free market naturally provides a diversity of supply offerings to meet the diversity of consumer demands.

The 2008 World Competitiveness Yearbook just came out and the U.S. is ranked #1 in world competitiveness again -- for the fourteenth year in a row.

• This ranking by the Swiss IMD is the third major, world-respected, independent ranking that concluded the U.S. is not falling behind the rest of the world in competitiveness.
• These three different independent assessments are in stark contrast to broadband critics' call for abandonment of free-market competition policies in favor of a more regulatory broadband industrial policy. 
  • In November 2007, the U.S. ranked #1 in the World Economic Forum's Global competitiveness Report for 2007-2008.
  • Last year, the Economist Intelligence Unit's latest Global Digital Rankings had the U.S. tied for second in the world.

Bottom line: Pro net neutrality and pro-regulation proponents love to jump on isolated data or studies like the OECD broadband rankings to justify a reversal of free-market competition policies in favor of more command and control government industrial policies.

However, facts are pesky things.

I have to admit that I was surprised by all the back-pedaling and calculated retreat by net neutrality proponents at the House Internet Subcommittee hearing on Chairman Markey's net neutrality bill HR5353.

Net neutrality proponents were clearly on the defensive, proactively responding to criticisms of the bill and not spending much time touting its benefits.

Kudos to Timothy Lee of Cato, for his post in Techdirt: "Changing the Internet's architecture isn't so easy." 

Mr. Lee challenged Professor Lessig's assertion at the Stanford FCC hearing that network owners have the power to change the Internet's architecture.

Why his insightful analysis is so devastating to Professor Lessig's core assertion underlying the need for net neutrality legislation is that it exposes some "inconvenient truths" about the reality of trying to change the Internet's architecture:

• First, Mr. Lee brilliantly points out that to control which devices got what content like Professor Lessig posits, would require instituting some type of handshake protocol that would be extremely difficult to get adopted by device manufacturers.
• Second, he points out how difficult it has been to change the Internet's architecture to IPv6, something there is a lot of consensus around to do.
• Third, he explains that these changes in architecture Lessig posits would be extremely expensive and take a long time.

I recommend you read his full post, it's brief, well-reasoned and fresh.  

The big surprise of the hearing was that Chairman Martin was a last minute witness. The Committee created a new first panel for just Chairman Martin, which ended up consuming about 60% of the allotted time for the whole hearing, and which was also the prime time when most of the Senators and press were in attendance. This surprise testimony practically relegated the other panel, which was expected to be the main event, to more of sideshow status.

Overall, this hearing was slightly more balanced than its House counterparts. Chairman Innouye continued his very measured and balanced approach, in that he said things that each side wanted to hear.

• Given that the Senate Commerce Committee is historically quite bipartisan, and that this committee remains split largely down the middle, I doubt if we will see much real movement on Dorgan-Snowe's net neutrality bill this session.
• If Chairman Inouye actually thought net neutrality legislation should make progress, he wouldn't have waited fifteen months since the introduction of the Dorgan-Snowe bill to hold the first hearing on it.
• It appears the real purpose of this hearing was basically to let off steam and throw the net neutrality activists a bone. 

The real import of the hearing was two-fold: 

Be sure to read Dick Armey's succinct analysis and perspective on net neutrality in his op ed: "Spare the Net."

• I am a big fan of Former House Majority Leader Dick Armey -- he is one of the true free-marketeer giants of our era.

Below is the full text of the letter I sent to all members of the Senate Commerce Committee and the Senate leadership questioning why of all times -- now -- for pushing net neutrality?

• Tuesday is the Senate Commerce Committee hearing on net neutrality entitled: "The Future of the Internet."  
• The attachment to the letter was my one-pager: "Why net neutrality is not a mainstream issue."  
• The link to the PDF of the letter with attachment is here.

April 22, 2008

The Honorable Daniel K. Inouye

722 Hart Senate Office Building

Washington, DC 20510-1102

ATTN: Telecom Legislative Assistant

Dear Chairman Inouye:

Kudos to Hance Haney of the Discovery Institute, who in his Tech Liberation Front blog post: "What did he say?, found another big misrepresentation whopper in Professor Lessig's lecture to the FCC on net neutrality last week.

• Hance pointed out in elegant detail, that Professor Lessig took the extensive quotes about the important value of end-to-end arrchitecture from former FCC Chief Economist Gerald Foulhaber in 2000 -- completely out-of-context.

  • Hance: "Normally when you quote someone extensively but selectively and you’re making a different (arguably opposite) point, you acknowledge that."

• Like I explained in my previous post "Bringing sunlight to Professor Lessig's Orwellian Doublespeak lecture at the FCC" I identified three clear instances of Professor Lessig misreprenting the views of others or weaknesses in his net neutrality argument.  

  • Hance's keen memory and ear identified a big fourth example.

  • I'll bet others heard additional misrepresentations or half-truths in Professor Lessig's FCC lecture -- as four misrepresentation examples clearly represent a pattern of not shooting straight to the public on net neutrality.

Not only was I stunned that the FCC allowed Professor Larry Lessig to lecture for a half an hour at the FCC's en banc hearing at Stanford, I was even more stunned no one challenged his blatant misrepresentation and Orwellian "doublespeak" in support of net neutrality.

• Remember in George Orwell's "1984," how "Big Brother" communicated that: "war is peace, freedom is slavery, ignorance  is strength" -- creating an upside-down-world where if an idea is repeated enough times... it somehow becomes true?

Here are three of the Orwellian "doublespeak" gems from Lessig's lecture at the FCC en banc hearing:

1. "Adam Smith" would have favored net neutrality regulation because all companies aspire to be "monopolists."
2. The "burden of proof" is on those who don't want to change the law to mandate net neutrality.
3. Being "conservative" means supporting FCC regulation of the Internet.

First, I literally could not believe my ears when Professor Lessig had the unmitigated gall to blatantly misrepresent in his lecture that if Adam Smith were to talk to the FCC that day, that Adam Smith would find a quote from his laissez-faire, free-market tome "Wealth of Nations" -- to somehow defend Professor Lessig's call for preemptive FCC regulation of the Internet.