Open Internet

Unfortunately, the FCC Chairman's remarks to a Silicon Valley audience last week -- trumpeting his new concern for "anything that depresses broadband usage" -- are creating abundant uncertainty for broadband businesses and investors.

Specifically, Gigaom reported: "When asked about the impact of data caps on broadband innovation by my colleague Janko Roettgers and how his thinking had evolved on the topic, the chairman said he was concerned about data caps. He added, “Anything that depresses broadband usage is something that we need to be really concerned about.” And he further said, “We should all be concerned with anything that is incompatible with the psychology of abundance.”

This appears to signal a stupefying 180-degree reversal of the FCC Chairman's well-established policy position on broadband usage pricing.

Google, Amazon, eBay, and Facebook reportedly are launching a new Internet Association in mid-September to be "the unified voice of the Internet economy, representing the interests of America's leading Internet companies and their global community of users. The Internet Association is dedicated to advancing public policy solutions to strengthen and protect an open, innovative and free Internet."

What is the back story here? Why is it being formed? Why now? What unites these companies? What is the Internet Association's public policy agenda? What does its formation mean?

Why is the Internet Association being formed?

The main public policy catalyst was bipartisan anti-piracy legislation that was moving swiftly through Congress last year that Google, Amazon, eBay and Facebook all strenuously opposed and helped defeat with an unprecedented Internet blackout day in January.

Please don't miss my latest Daily Caller op-ed: "U.S. Government's Obsolete and Wasteful Spectrum Hoarding and Rationing" here.

This is part 11 of my Obsolete Communications Law research series.

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Obsolete Communications Law Op-ed Series:

Please see my latest Daily Caller op-ed: "The FCC's 1887 Railroad Regulation Mindset" here. This piece is part 10 of my Obsolete Communications Law research series.

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Obsolete Communications Law Op-ed Series:

Part 1: "Obsolete communications law stifles innovation, harms consumers"

Please see my latest Daily Caller op-ed: "The FCC Showcases its Growing Obsolescence" here. This piece is part 9 of my Obsolete Communications Law research series.

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Obsolete Communications Law Op-ed Series:

Part 1: "Obsolete communications law stifles innovation, harms consumers"

Part 2: "The FCC's Public Interest Test Problem"

FOR IMMEDIATE RELEASE -- August 21, 2012

Contact: Scott Cleland 703-217-2407

The FCC's Obsolete Section 706 Report

Obsolete law and technological assumptions yield nonsensical reporting requirements

WASHINGTON D.C. – Concerning the FCC's release of its Section 706 report on "Advanced Telecommunications Incentives," the following quotes may be attributed to Scott Cleland, Chairman of NetCompetition.org:

In writing "Internet Pirates Will Always Win," Nick Bilton, The New York Times's technology columnist whom I read and respect, has unwisely adopted the political logic and public narrative of the piracy lobby that "information wants to be free." Unfortunately, I don't think Mr. Bilton has fully thought through the serious negative implications of his flawed logic and misplaced political support.

Mr. Bilton is not the first, and won't be the last, columnist to buy into the piracy lobby's deceptive political narrative that fighting piracy is akin to a futile game of Whac-a-mole, so content creators should just unilaterally surrender the concept of market pricing of their content going forward and offer it free to the public on the Internet or at a minimal price that Internet pirates judge is "fair." Mr. Bilton concluded: "Sooner or later, the people who still believe they can hit the moles with their slow mallets might realize that their time would be better spent playing an entirely different game."

The unspoken "different game" here is that the Internet should be more of a public information commons where everything is free of cost to access, and no permission or contract is required to do most anything on the Internet, in stark contrast to being more of an Internet marketplace where property owners of all kinds can charge for and contractually control the use of their property and individuals can assert control over how their private information is used.

Evidence abounds that the industry business model of online advertising, minus Google, is shockingly weak competitively, given how many people assume advertising is supposed to be the viable competitive monetization engine that will sustain the "free and open Internet" long term.

Anyone open to connecting-the-dots of recent public evidence will see an obvious dichotomy: Google is thriving, while much of the rest of the online advertising industry is struggling despite unprecedented: opportunity to reach users, technological efficiencies, and access to troves of private data to target ads to produce more revenue growth.

Examine the accumulating troubling evidence of how weak online advertising competition has become.

The Internet Advertising Bureau's latest reporting of 15% online advertising growth for the industry in 1Q12 masks the large Google vs. competitor revenue growth dichotomy. Given that Google grew 24% 1Q12 and comprises almost half of all U.S. online advertising per eMarketer, I calculate that the rest of the online advertising industry is growing only about 8%. That means Google is growing three times faster than its online competitors and continues to take market share at an accelerating rate.

Please see my latest Daily Caller Op-ed: "Google Fiber: Modern Technology, but Obsolete Policy Thinking" here.

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Obsolete Communications Law Op-ed Series:

Part 1: "Obsolete communications law stifles innovation, harms consumers"

Please see my latest Daily Caller Op-ed: "FCC's Over-Reliance on Obsolete Law" here. It spotlights the FCC's clear pattern of relying on obsolete law and non-existing statutory authority.

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Obsolete Communications Law Op-ed Series:

Part 1: "Obsolete communications law stifles innovation, harms consumers"