August, 2009

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?

Evidence of the Open Internet's growing security problem only continues to mount. There also appears to be a growing and troubling disconnect between the seriousness of the actual problem and the seriousness of attention paid to the growing Internet security problem.  

The U.S. Government is relatively quietly proposing a major change in its online privacy policy from a Government ban on Government using "cookies" to track citizens' use of U.S. Government websites to allowing the Government to track some citizen online behavior with some restrictions.

• A Washington Post article highlighted privacy groups concerns about the policy shift. Also see comments by EPIC, CDT/EFF, and ACLU.  

This policy shift is a quintessential example of the shift away from a default expectation of online privacy, to the default "publicacy" approach increasingly taken by many web 2.0 entities.

While the latest net neutrality bill introduced in Congress has no chance of passage as drafted, it is a bay window view into how extreme the net neutrality movement has become and into what they are seeking from the FCC via backdoor regulation.

• The proposed Markey-Eshoo bill, HR 3458, which was drafted in close coordination with FreePress and the Open Internet Coalition, is much more extreme than previous bills in 2008 and 2006.

Why is this bill the most extreme version of net neutrality yet?

It is interesting that since I started this series spotlighting that security is and has been, for all practical and official purposes, a low corporate priority for Google, a Googler now publicly claims: "for Google, there is no higher priority than the safety and security of our users."

First, antitrust's modern day Pinocchio claimed that competition is just "one click away," now Google is claiming that the notion that scale is important to search competition is "bogus."

• Google's Chief Economist, Hal Varian is pushing a preposterous, self-serving argument in CNET that scale is not important to search competition:
  • "...the scale arguments are pretty bogus in our view because it's not the quantity or quality of the ingredients that make a difference, it's the recipes. We think we're where we are today because we've got better recipes...  I also think we have a better kitchen..."

Why is Google's "bogus" claim bogus?

First, does Google think for a minute that antitrust enforcers' investigations have not assembled substantial evidence/quotes from Google itself about the importance of scale in search?

Vint Cerf, Google's Internet Evangelist, urged the FCC at a broadband workshop last week to regulate broadband networks as a utility like the electrical grid.

• I wonder if others spotted the irony in Google's "utility" regulation prescription for broadband.

Google's Mr. Cerf looks at the most competitive broadband market in the world, declares it inherently anti-competitive, and summarily prescribes... monopoly utility regulation for the entire broadband industry.

Meanwhile back at the Google Book Settlement ranch... Google has negotiated a de facto book search monopoly for itself in the Book Registry "utility" of the Google Book Settlement, without any regulation or Government oversight.  

The data and evidence show that broadband is not a public utility warranting economic regulation of prices, terms and conditions; this is contrary to the assertions of net neutrality proponents: the Markey-Eshoo Bill, FreePress, the Open Internet Coalition, and Google's Internet Evangelist Vint Cerf, among others.

Why is broadband not a public utility? 

First, it is a competitive service, not a natural monopoly service.

A public utility presumes "natural monopoly" economics where economies of scale and scope preclude the possibility of competitive facilities/services. 

The lead WSJ story today, "Arrest in Epic Cyber Swindle" covering the cybercrime ring theft of over 130 million credit/debit cards, is a stark high-profile reminder of the very real and pervasive Internet problem of lack of cybersecurity. 

Kudos to Link Hoewing's insightful post on "The Internet's Evolution and Network Management" on Verizon's Policy Blog.  

• Its an important analysis and perspective for anyone wanting to understand how FCC regulation of the Internet and network management could negatively and seriously harm innovation and the Internet's natural evolution.