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Regulation

Paid Prioritization: The Demonization of Market Economics

Now we know what "real net neutrality" and "openness" are, and that they are the antithesis of free market economics or competition.

As the FreePress-led letter to the FCC made clear on Friday: "Paid prioritization is the antithesis of openness. Any framework that does not prohibit such economic discrimination arrangements is not real net neutrality."

What is "paid prioritization?"

  • It is quality of service guarantees, market economics, supply and demand, market-based pricing, investment incentives, competitive differentiation, and reasonable network management.
  • Now we know "real network neutrality" and "openness" is more uneconomics from FreePress and the extreme left.

 

Remember FreePress' last Uneconomics 101 lesson was that "above-cost pricing" was an "unfair business practice."

Sinking Level 3 Seeking FCC Internet Regulation Bailout

The extent to which Level 3's business is underwater is the untold story behind Level 3's regulatory "hail Mary" claim that its Internet peering dispute with Comcast is somehow a net neutrality violation.

  • Apparently Level 3 has concluded that since it hasn't found a straight-up way to compete successfully in the Internet marketplace on its own, it wants an Internet regulation bailout from the FCC, in which the FCC would: deem Level 3 a market winner; price regulate the Internet for the first time; and force its competitors to implicitly subsidize Level 3 with mandated Internet peering price subsidies.
    • (To appreciate how bogus Level 3's claims are, click here for a complete rebuttal.)

Why is Level 3 seeking a de facto Internet regulation bailout from the FCC?

First, Level 3 is a financially-sinking business with no legitimate growth prospects.

FreePress to FCC: Ignore Congress/Courts, Use 1910 as Guide

Only FreePress would hold a press conference to release essentially a longer-version of its previously-debunked legal analysis calling for the FCC to regulate competitive broadband providers as Title II telephone public utilities.

The essence of the call, which made no news, was FreePress reiterated that the FCC should ignore:

 

  • The Appeals Court's decision that the FCC does not have direct authority to regulate the Internet;
  • Congress' constitutional authority and intent to address this issue; and
  • Basically everything that has happened in the last 100 years -- (because FreePress Chairman Wu says the answer to the FCC's policy conundrum can be found in the policy established in 1910 -- before the FCC, TV, computers or the Internet existed.)

For anyone that wants to examine in depth why FreePress' legal and policy analysis remains fatally-flawed and would cause an unmitigated disaster click: HERE...

The FCC's Positive Policy Pivot?

FCC Chairman Julius Genachowski signaled a major FCC policy pivot Monday, from a fourteen-month focus on regulating net neutrality to apparently a new singular focus on "the economy and jobs" -- in his annual speech before NARUC, the association of state utility regulators.

 

  • (Kudos to Randy May of the Free State Foundation for flagging this very significant policy shift in his outstanding post.)

 

Takeaways from the FCC Chairman's speech.

First, this is a very significant speech to pay attention to, because the FCC is laying out what the states can expect from the FCC in the year ahead.

Election Takeaways for the FCC

What do the mid-term election results mean for the FCC?

First, FreePress' version of net neutrality was completely repudiated in the election.

 

  • Every single one of the 95 House and Senate candidates that FreePress/PCCC got to publicly pledge support for net neutrality -- lost their election in the mid-terms. Yes, that is indeed a 0-for-95 record here.
  • The FCC should take note that the main "political" driver behind trying to make net neutrality into a national grass roots issue, FreePress/PCCC/Moveon.org, could not get the issue to register on the election radar screen, and where ever they did attract a candidate endorsement of their position, they failed 100% the time in having that candidate get elected.

 

Second, most of the FCC's business is not political or partisan -- and it need not be. (The 1996 Telecom Act was almost unanimous. And the overwhelming majority of FCC decisions are 5-0.)

 

Retransmission problem is regulatory failure not a free market problem

The current harm to consumers from the latest unnecessary incident of retransmission brinksmanship is the clear result of FCC regulatory failure.

Fellow ardent free marketer, Randy May of the Free State Foundation, has a dead on piece that I highly recommend that exposes that the current broadcast retransmission negotiating process -- as no "market" that a free marketer would recognize.

 

  • A set of FCC rules that still fantastically assumes a monopoly video market exists, when one clearly has not existed for well over a decade, creates a profound regulatory failure that distorts the market and harms consumers.

 

The reason some consumers currently are blacked out from their favorite sports programming is because the FCC has known for a long time, that it has a broken, out-of-date, and counter-productive retransmission negotiation process, and that it has not done anything to bring the process into the 21st century or to correct the dysfunctional imbalance that causes predictable serial disputes that harm consumers.

Simply, if the FCC spent less time on trying to fix potential unproven problems, like net neutrality and Title II regulation for which the FCC does not have legal authority, and more time on fixing actual problems harming consumers on their watch that they do have the authority to fix -- American consumers would be much better off.

*****

FreePress wants revolution not resolution of net neutrality

Ever wonder why the net neutrality issue can't be resolved, despite all the many earnest efforts, negotiations, and compromises to resolve it over the last four years?

 

  • The simple reason is that FreePress -- the head net neutrality activist -- does not want to resolve net neutrality; every time there is a real effort to resolve the issue, FreePress does everything in their power to blow up any prospect for resolution.
  • The one constant in the Net neutrality debate over the last four years has been FreePress’ fierce opposition to any real resolution, because FreePress wants the opposite -- revolution.

 

Before I recount FreePress’ ignominious longstanding record of opposing resolution of net neutrality, it is important to understand why FreePress is such a singularly destructive, and not a constructive, force in the net neutrality debate.

 

Takeaways from the FCC's Open Internet Further Inquiry

What have we learned from the FCC's wise inaction this week, in deciding to not vote to declare broadband a Title II telephone service before the election, and to ask more questions in a further Open Internet regulation inquiry about specialized and mobile services?

#1 Stakeholder collaboration/negotiation works. The FCC apparently now better recognizes that the open industry collaborative dynamic that has been so consistently successful in resolving most every other major Internet issue over the last couple of decades, can also succeed in appropriately resolving the FCC's Open Internet concerns now -- if only given the time and flexibility to negotiate a workable outcome.

#2 Apparently net neutrality is not the popular populist political issue it has been touted to be. The September-October period before an election is when the real political rubber meets the road.

Had a good hour Net Neutrality debate on NPR station WFAE

NPR/WFAE host Tim Collins of Charlotte Talks hosted a very good hour-long radio show on net neutrality this morning featuring CDT's very able Andrew McDiarmid, promoting net neutrality/Title II regulation, and me opposing formal net neutrality/Title II regulation.

  • It was a fresh and informative overview for the average listener.
  • The podcast link is here.  Please add comments if you wish.

What those who follow this blog would find most amusing, was my defense of Google from the sand-blasting it has gotten from the extreme left for its attempt with Verizon to be constructive in trying to find a workable framework/compromise on net neutrality for the FCC.



















 

Google: Looking Out for #1 on Net Neutrality -- Analyzing its Competitive Implications

Google's self-interested proposal with Verizon on net neutrality legislation publicly spotlighted to many for the first time, Google's Machiavellian manipulation of Washington for competitive advantage, i.e. proactively seeking regulation of Google's competitors while ensuring Google remains unfettered by any regulation.

  • Net neutrality activists are now shocked, shocked, that after five years of brilliantly portraying the starring role of the too-good-to-believe "don't be evil" corporate organizer and benefactor of net neutrality, that Google ultimately would just take care of itself, and prove that net neutrality was simply a shrewd means to an end -- best positioning Google to dominate Internet information distribution.
  • The movement's most lovable lambkin, has been unmasked as a capitalist wolf in sheep clothing.

This piece will analyze: why Google surprised everyone; what's in this for Google; and why many like Skype, eBay, Facebook, and the TV business, should be very concerned with Google's Machiavellian positioning here.

Let's deconstruct the Google-Verizon net neutrality proposal from Google's perspective.

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Q&A One Pager Debunking Net Neutrality Myths