Skype

Verizon's announcement that it will allow customers to choose any app and/or any device on its entire network in 2008 is proof positive that competitive market forces best serve consumers, not rigid net neutrality regulation or legislation.

I see three big takeaways from the Verizon announcement: consumer protection/reliability; market discipline, and more diversity of consumer choice.

The Big Government advocates who try to paint the U.S. as falling behind in broadband so they can justify an activist National Broadband Policy -- have a huge and embarassing hole in their argument -- the U.S. lead in wireless/mobile broadband, including U.S. leadership in transitioning prime analog TV spectrum to mainstream digital broadband use.

• The World Radio Conference of the UN, which is wrapping up this week in Berlin, indirectly showcases this U.S. lead in mobile broadband.
  • Per the International Herald Tribune, the U.S. is way ahead of the rest of the world in transitioning analog broadcasters to digital and reallocating this best-available spectrum for mobile-broadband use --
    • IHT: "The world is in varying stages in going digital, with U.S. broadcasters switching by 2009, Asian broadcasters by 2015, and most European countries somewhere in between." 
  • So how does being 2-6 years ahead of our international competitors in bringing the best available spectrum for mobile broadband to consumers -- constitute "falling behind" or "a failure of no national broadband policy?"

This U.S. world leadership in transitioning prime spectrum to optimal consumer use is powerful evidence of the superiority of our broadband policy approach, which embraces market forces more than just about any other major country in the world.

If Professor Tim Wu is the "Father" of net neutrality, since he named the issue in 2002, I guess Gigi Sohn can be called the "Mother" of net neutrality because in 2002 her organization, Public Knowledge, birthed the original political manifesto on this type of thinking: "Saving the Information Commons."   

Yesterday Ms. Sohn, the Mother of net neutrality, participated in a conference call for left-leaning bloggers to indoctrinate them into the right and wrong way to blog about FreePress/Public Knowledge's petition to the FCC on Comcast's network management.

• Well when Mom's not happy, nobody's happy.  
• In response to questions about what bloggers could do, Mother neutrality effectively called on bloggers to spank Senate Chairman Innouye for not listening to Mom.
  • The impertinence of those 83 year-old, seven-term U.S. Senators who won't listen and do as their told!
  • Where is the respect anymore?   

Ted Hearn of MultiChannel News had a great story on this: "Sohn to bloggers: target Inouye" 

The FreePress Comcast petition has an unreasonable view of what "reasonable" network management is in the FCC's net neutrality policy.

First, the petitioners ignore the reason the FCC exists in the first place -- the absolute necessity for some network management in order for communications systems to function as needed.

• The predecessor to the FCC, the Federal Radio Commission was created in 1927 because of the chaos of an completely unmanaged network (like the petitioners currently are advocating for) --
  • too many stations were broadcasting on too few frequencies making the airwaves a garbled and unworkable "tragedy of the commons."
• The Government brought order to this chaos by granting the FRC/FCC the authority to make spectrum licensed property, grant licenses, and assign frequencies and power levels for each license.  

Second, the petitioners ignore that "reasonable network management" of communications is directly analogous to reasonable traffic management of our roadways.

Tim Wu, the "father of net neutrality" because he made up the term a few years back, was surprisingly candid in a CNET article that: "the whole net neutrality issue is really about a power struggle."

• Well we now know net neutrality is not about:
  • A supposedly longstanding non-discrimination "principle" of the Internet;
  • all bits being equal; or
  • freedom of speech.
• It's about "power."
  • We knew it all along. 
    • It's really about the "power struggle" over corporate welfare for the dotcom billionaires at Google and eBay who want the consumer to subsidize their piggish bandwith demands in order to maintain their 90% gross profit margins.  

I also found another candid quote by the Moveon.org/FreePress folks that also tells us what they are up to:

The Moveon.org/FreePress petition to the FCC to declare Comcast's reasonable network management illegal, is a deceptive back-door scheme to reverse FCC deregulation of broadband as an information service and to (de facto) reinstate common carriage for broadband.

• The petition will be found to be a bogus and manufactured scheme to deceive the FCC and the public that necessary, responsible, and "reasonable network management" -- that serves consumers and the Internet public by delivering quality of service and protecting consumers from the harm of viruses, spam etc. -- should be declared illegal "degrading" of an Internet application.
• Upon full FCC airing of this issue, it will be clear that the offending P2P application traffic is the culprit that is in fact harming the overwhelming majority of Internet consumers by "degrading and imparing" the responsiveness and utility of the Internet for the many because of the irresponsible bandwidth hogging of the few.

First, if managing out-of-control p2p traffic that is degrading and impairing the responsiveness and utility of the Internet for the many by the few is not "reasonable network management" then no network management is reasonable.

The American Consumer Institute did some more great work on the importance and impact of broadband. Kudos!

• I recommend you take a look at their eye-opening new study: "Broadband Services: Economic and Environmental benefits." 
• The premise is that promoting broadband is smart national policy because of the tremendous cumulative productivity and energy savings that more broadband use enables.

The summary table on page 48 encapsulates the study's findings well.

Why is net neutrality not Green?

• The current free market broadband policy is succeeding greatly in rapidly deploying broadband to all Americans and in promoting facilities-based broadband competition.
  • The FCC's latest broadband competition report that just came out shows that U.S. high speed connections grew an astounding 61% in 2006 from ~50m users to ~80m users.
• Even the serious prospect of net neutrality legislation becoming law would chill investment and discourage continuation of the broadband success that the current free market policy has generated.
  • Net neutrality is not Green because it would slow the extremely environmentally beneficial trend of increased broadband use, which creates massive national energy savings as the American Consumer institute study attests.  

The unanimous passage of a new seven-year Internet Tax Moratorium, is powerful evidence of how far out of the political mainstream the net neutrality movement is.

• The fact that everyone in Congress, from the right and the left, came together and supported extending the Internet tax ban for twice as long as Congress did in the past, proves unequivocally that political consensus is possible in Congress on mainstream Internet issues.
• Moreover, the near unanimous passage of the 1996 Telecom Act by Congress was another powerful example of how the left and right could come together and agree overwhelmingly on sound Internet/communications policies like:
  • "...preserve the vibrant and competitive free market that presently exists for the Internet... unfettered by Federal or state regulation;" and 
  • "To promote competition and reduce regulation in order to secure lower prices and higher quality services for America telecommunications consumers and encourage the rapid deployment of new telecommunications technologies."

Sound mainstream policies can attract near unanimity in Congress -- despite rampant partisanship. 

If net neutrality was truly a long-standing "principle" of the Internet, like its proponents have claimed, it would attract strong political consensus.

Isn't it illuminating that eBay, the online auction monopoly with 95% market share per Jupiter Research, and the owner of Skype that is lobbying hard for regulation and legislation to force the "unlocking of phones" and mandate net neutrality regulation -- is so uncooperative with law enforcement trying to crack down on organized theft?

• Could it be that calling for others to be "open" is just code, cover and justification for stealing other's property or property rights?

Reuters reported last week: "U.S. retailers want online sellers to fight theft." 

•  "U.S. retailers and police called on Congress on Thursday to require online auction sites such as eBay to post the serial numbers of items for sale to help crack down on gangs of professional shoplifters." 

• ""Operators of sites such as eBay have historically failed to provide any meaningful information to retail investigators," said Karl Langhorst, director of loss prevention for Randall's and Tom Thumb stores, a division of Safeway Inc.""

Seems like more hypocrisy and situational ethics from eBay, where they seek corporate welfare from government, while not cooperating fully with law enforcement to fight "organized theft."

• Maybe there is "Honor among thieves."

With all due respect to all the folks I read often at Business Week, I have to challenge the thinking behind Stephen Wildstrom's column in Business Week where he shares that he switched his year-long position opposing new net regulation, largely because of Verizon's admitted mistake in delaying by one-day a text messaging approval code to NARAL. 

After Verizon and the rest of the industry have handled literally billions upon billions of communications for years without significant similar incidents, one company makes an admitted mistake, takes full responsibility, immediately fixes it, changes its procedures so it won't happen again, -- and Mr Wildstrom's answer is to now throw the common-carrier regulatory book at Verizon and the whole industry?