FTC

If one only listened to net neutrality proponents, one would conclude that American innovation was at death’s door, because there was no “net neutrality� in law.

• The reality, which is obvious to anyone with functioning eyes or ears at the Consumer Electronics Show in Las Vegas this week, is that innovation in the American market is exceptionally vibrant!
• As a result of the consumer electronics show this week, you can’t go to a web news service or look at any major newspaper or magazine and not see stories on the new innovations leveraging connectivity.
• Innovation and competition are obviously extremely healthy without net neutrality legislation.   

Where is the evidence of the horrible discrimination problem the government must fix immediately? There is none!

Net neutrality proponents are trying to make hay and promote net neutrality by saying that the application of NN to WiMax fixed wireless in one of the FCC's AT&T merger conditions amounts to breaking the wireless barrier.

A little fact check and history lesson is in order to douse this silliness.

Wireless is obviously competitive; everyone who turns on a TV or reads a newspaper and sees the blizzard of ads knows it is very competitive. The lame "duopoly" argument is a joke when applied to wireless, noone will take it seriously.

• It is also important to note that since Congress passed a wireless competition law in 1993, wireless has not been subject to any net-nutrality-like regulation. Let me restate the import of this: the 210 million Americans with cell phones have never had net neutrality and have done just fine. No problem here, just hyper-regulatory over-reaching based on ideology and not facts, logic, good policy or common sense.

Wifi is free and has never been subject to net neutrality. The U.S. has more  WiFi hotspots than any other country. What is the problem here that needs to be fixed?

The FCC condition extending NN to WiMax, a nascent technology with miniscule market share to date, is not a big deal, becuase it is no "principle." AT&T is also forced to divest WiMax spectrum and that WiMax spectrum won't be subject to NN.  Some principle!

The attempt to lasso wireless into NN would be laughable if its dire unintended consequences were not so serious. Has anyone heard the phrase: "if it ain't broke don't fix it?"

In my recent blog post, "Why Microsoft's new Internet 7 explorer browser discriminates against small business" I mistakenly used the incorrect first name in my transcription of a Wall Street Journal quote. The quote should have been attributed to "Greg" Waldron (not "Gerry"), of the Waldron company http://thewaldroncompany.com/index.html.  Greg Waldron is founder of a company which is an online provider of water fountains. Precursorbog regrets the error.

Google, Yahoo, and IAC, big pushers of net neutrality corporate welfare, have expanded their effort to eat at the public trough again. See the Wall Street Journal article of today "SEC reviewing Its Data Fee Ruling". 

The super profitable online giants actually have the gall of claiming that paying fees for real-time stock exchange quotes is "beyond the economic reach of an advertising medium like the Internet." Unbelievable! Google is basically printing money with the advertising medium on the Internet! Shouldn't we all throw some coins in Google's platinum "tin cup" to show our concern?

They continue their poor man charade by whining that: "many millions of public investors who access their web sites daily will be injured by the unreasonable fees permitted by the staff's approval of the rule change." Please. These dotcom billionaires can afford to pay normal cost of doinh interstate commerce without passing on the cost to consumers. If they had more competition they wouldn't even consider trying to claim they can pass this on to consumers. But like net neutrality, anytime there is a chance of the online giants costs going up and reducing the online giants huge profits, they run to Washington and ask for corporate welfare. Doesn't everyone understand, its Google's inalienable right for the government to protect Google's extraordinary profitability!

In due time, people will see through the online giants self-serving Washington behavior and have no sympathy for this outrageous behavior. What's really funny is that these people are so clueless to be lobbying for this corporate welfare just when the Democrats are taking over the House and making lobbying reform and ethics a top agenda priority. Doesn't anyone else see the irony?

The New York Times obviously felt compelled to write a counter editorial to the Wall Street Journal’s three recent blistering editorials against net neutrality.

The NYT apparently just dusted off their simplistic editorial of last year and updated it with a phone call to a person or two.

They are still rehashing the ignorant claim that broadband companies are trying to create a “two tiered Internet.� If the NYT had any awareness of this issue at all, they would know that argument is factually wrong and that informed NN proponents no longer try to make that silly and ignorant argument. The facts are that the Internet has long been multi-tiered. There is dial up Internet access tier and multiple speed/price tiers of broadband Internet access. The Internet backbone since its commercial inception has had three different tiers based on the reach of the peering network.

The editorial also trots out the nonsense that without net neutrality innovation would be threatened and small companies could not afford the fees and “the next eBay or Google might never be born.� Hello? Is it the new policy of the NYT that the government should subsidize “garage� entrepreneurs Internet access bills? Does the NYT think really think any entrepreneur worth their salt can’t afford or can’t raise funding to pay $15-40 a month for broadband access?

Net neutrality proponents are trying to claim that the net neutrality conditions that they extorted from AT&T represent a template for net neutrality legislation. Ridiculous!

First, these conditions were extorted because of a procedural and political anomoly, not because of any consensus for them. On the contrary, Chairman Martin said the net neutrality conditions were "unnecessary" and "discriminatory." And a majority of the FCC opposes broadening these conditions to the industry at large.

Second, the merger conditions only apply to one of several U.S. broadband competitors, and the conditions are company specific and are not useful or accurate in applying to other technologies or companies. Moreover, it does not apply to AT&T's business customers, to its unique IPTV video service or its wireless service. It supposedly applies to WiMax, but AT&T is being forced to divest WiMax spectrum that the condition will not apply to. And is WiMax WiFi? Which alphabet version of WiMax does this condition supposedly apply to? There is no useful definition here. This is the blogilantes' "frankenstein definition" which is of no use to any fair legislative or judicial process.   

Third, the supreme irony here is that these conditions were alleged to promote non-discrimination but were applied in a highly discriminatory way to only one company in a perversion of the normal democratic process. 

Finally, those proponents that expect other companies to abide by the conditions that their competitor had to abide to because of an anomolous merger situation, are in dreamland. This is still a free country, there is still rule of law, it still takes a majority of the House, 60 votes in the Senate and the President's signature to change the law. The net neutrality blogilantes "will run into the buzzsaw" of the American constitutional process. 

The FCC conditions imposed on the AT&T-Bell-South merger are among the most regulatory government micro-management that I have observed in my fifteen years covering the industry.  The FCC minority leveraged a procedural and political anomolous circumstance to extort merger concessions that never would have survived an open democratic process. This was the functional equivalent of a back alley shake-down, where the companies had to give into unconscionable extortion in order to secure their commercial freedom.    

That being said, it is clear that AT&T had to give up a lot of regulatory concessions in the areas of special access and divestiture of 2.5 MHz spectrum in order to fend off the worst of the net neutrality extortion.

• AT&T agreed to continue to abide by the FCC's net neutrality principles for another couple of years which simply extends the agreement they had already made on the SBC-AT&T merger last year for roughly a year longer.
• They also agreed to not degrade or prioritize traffic, like they had already publicly agreed not to do, with exceptions for their IPTV business, enterprise business and their wireless business.
• Bottom-line on net neutrality -- No big change here from what AT&T was already doing and pledging to do. AT&T appropriately resisted the worst of the net neutrality concessions.

I fully expect that net neutrality will remain the biggest regulatory issue going forward. The online giants will continue to manipulate the political process for competitive advantage, seeking to prevent non-neutral behavior from their biggest potential competitors when they are not neutral themselves and when they have more gatekeeper influence over the Internet than any broadband company. 

Microsoft is not neutral. Microsoft's new anti-phishing feature of its Internet Explorer 7 web browser blatantly discriminates against the 20.6 million sole proprietorships in the U.S.A in favor of their net neutrality allies: Google, Amazon, eBay and Yahoo and IAC.

• Microsoft's new Explorer browser will be one of the most blatant non-neutral forms of Internet discrimination in the history of the Web, because when Microsoft rolls out this new browser with its Vista upgrade in 2007, the overwhelming majority of Americans will be using this new discriminatory Microsoft browser to supposedly gain "free and open" access the Internet.

The 12-19-06 Wall Street Journal article "Software to spot "Phishers" irks small concerns" is a must read to understand this problem. Kudos to the reporter, Riva

I remain disturbed at the hypocrisy and blatant double standard of net neutrality proponents. It is classic case of "do what I say, not what I do." Their "ends-justify-the-means" MO is glaringly obvious to anyone with an ethical compass or an appreciation of the "democratic process" in our country.

Hiding behind the words and sanctimony of "ethics" and "democracy" net neutrality proponents appear to have no ethical qualms about perverting the democratic and ethical process that they claim to support in order to extort net neutrality conditions on the AT&T-Bell South merger that they know they could not get in an open, democratic or ethical process.

Now that net neutrality proponents have won a tactical victory in successfully intimidating FCC Commissioner McDowell from not participating in the AT&T-Bell South merger (by threatening to hound him to the ends of the earth on trumped-up ethics allegations if he did not stay out of the merger) lets see if they hold themselves to the same ethical high standard.

Lets see if they really care about true ethics, which are about respect for process, the rule of law, and basic fairness. How is it ethical and fair to extort rule changes in the happenstance situation of a merger process rather than the normal open and fair deliberative rulemaking process which fairly applies to all parties? How is extortion due process? How is it ethical to say the ends justify the means? If ethics were truly important to net neutrality proponents they would seek to use the process in only an ethical and open way, not as a way to extort concessions that the normal policymaking process could not generate.

Net neutrality is the ultimate unprincipled double standard. It is clear that ethics and fairness are expected of others but not of themselves. Net neutrality proponents should think long and hard about justifying the "means" of unethical extortion in order to achieve the "ends" of net neutrality. Do they really want to win dirty? To soil our public process with win-at-all-costs, take-no-prisoners, ethically-challenged tactics? How will they expect others to respect process, rule of law and ethical standards if they do not abide by them themselves?

Ethics are about doing something the right way for the right reasons. Extorting out-of-process concessions in the AT&T-Bell South merger is not doing it the right way for the right reasons.

Now that net neutrality proponents have claimed to stand for high ethical standards, lets hold them to their word.