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Submitted by Scott Cleland on Fri, 2006-12-29 20:18
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.
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.
Submitted by Scott Cleland on Fri, 2006-12-22 12:33
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.
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
Submitted by Scott Cleland on Wed, 2006-12-20 10:06
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.
Submitted by Scott Cleland on Tue, 2006-12-19 08:39
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.
Submitted by Scott Cleland on Mon, 2006-12-18 12:48
One of the comments my able debate opponent, Gigi Sohn, President of Public Knowledge, made last Friday stuck with me over the weekend as very much an "ostrich-head-in-the-sand" point of view.
After I pointed out that prices were falling, consumer choice and speed were increasing, broadband investment and deployment are healthy, and that there was an explosion of innovation and new products... Gigi replied that ~98% of people access the Internet through their phone or cable company. (she ignored my comment that 8 sort years ago we had a monopoly) Then she sarcastically dismissed the possibility that wireless or other technologies could ever compete with phone or cable -- or that it would be a long time coming.
Submitted by Scott Cleland on Fri, 2006-12-15 18:45
I debated Gigi Sohn of Public Knowlege today on net neutrality at the annual PLI conference here in Washington.
Here is the essence of my opening remarks -- a concise case against net neutrality.
Three main points:
1. Net neutrality is a bogus issue -- there is no problem to solve.
2. Net neutrality would set America back.
Submitted by Scott Cleland on Wed, 2006-12-13 12:16
Google did a good job of "spinning" the good aspects of its new plan to create a private market for valuing Google employee's stock options. This blog intends to shed some light on whether it is such a good idea. I think not. The New York times coverage was the most comprehensive of the six papers I read on the topic.
I am writing about this because as a former leading independent investment researcher, I understand conflicts of interest and capital markets intimately. As the first congressional witness explaining what went wrong with Enron, and the first to see through the spin with WorldCom, I can tell you there is a whole lot for Google shareholders and investors to be worried about in Google's latest example of "innovating without permission." It is especially troublesome when people chime in with the inane insight "if Google does it, it validates it as a smart idea." Hold onto your wallets when that kind of idiocy gets quoted and unchallenged.
During the bubble, stock price routinely was correlated to "smarts" and we all know how that ended. I acutely remember being Bernie Ebbers whipping boy and being derided by him as the "idiot washington analyst" for having the audacity to challenge the WorldCom story at its apex when it was owned by more funds than any other telecom stock. When WorldCom was worth $150b, like Google is now, there were tons of people fawning over Ebbers and others who simply rode momentum of the bubble up. They weren't geniuses becuase their stock prices were high, people just assumed that stock market success equated to brilliance.
Submitted by Scott Cleland on Tue, 2006-12-12 16:19
Ugh. Internet regulation creep continues. The Federal Trade Commission (FTC) said yesterday that companies that engage in word-of-mouth product endorsements must disclose if recommenders are being paid to recommend the product or service. The Washington Post had a good story on it today.
Since this is all about forthright disclosure, let me reiterate that I openly and regularly disclose that I represent broadband interests in the net neutrality debate. And as a strong believer in law enforcement, I have no sympathy for those engaging in deceptive or fraudulent business practices. That said, I also dread Internet regulation creep, because it will ultimately slow economic growth, job creation and innovation.
Submitted by Scott Cleland on Mon, 2006-12-11 20:43
The feedback has been that it was a well written and thought provoking letter/analysis that got people and investors to think of the net neutrality issue and fight in a much broader, holistic and linked way.
The letter was also an eye opener to investors that Microsoft is not really controlling its own destiny in Washington, but following Google's leadership. Google certainly appreciates the irony of an eight year old company taking the "adult" company to school in Washington.
Given that Google presents the biggest real threat to Microsoft's web services plan in both the marketplace and in Washington, I find it interesting that Microsoft has allowed itself to be so outsmarted and outflanked by Google in Washington. Is Redmond going soft or just distracted?
Submitted by Scott Cleland on Fri, 2006-12-08 18:45
The reality is that net neutrality didn't become an issue and have any traction until pro net neutrality forces attached the issue to a moving legislative vehicle last year -- the video franchise reform bill.
Well now the shoe is on the other foot.Ã‚ Net neutrality proponents now need to build momentum for a bill from scratch,Ã‚ because the companies that pushed it last time are not going to push it this time. They will be able to play defense, which as the net neturality proponents learned this past year, is a lot easier than legislating.
Next year we will see if there is a real there there surrounding net neutrality. Net neutrality proponents will learn for themselves how easy it is to play defense rather than offense in Washington.
It will be interesting to see if net neturality proponentsÃ‚ can turn both theirÃ‚ ragtag coalitionÃ‚ and their ratbag of unsubstantiated allegations into policy consensus and a successful legislative vehicle. It will prove hard. Real hard.