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Great pearls of wisdom from the Internet's "grandfather" -- Farber-Faulhaber paper on wireless innovation

If you are interested in learning great "pearls of wisdom" based on expansive experience and clarity-of-thought on the question of wireless innovation, and proposed Internet regulation of wireless innovation, please read the Farber-Faulhaber white paper; at a minimum, please read the many wonderful highlights that I have pulled out of the paper for you below.

Professor Dave Farber, a widely respected Internet pioneer who has been called the "grandfather of the Internet" for his contributions to computer science, and a former Chief Technologist for the FCC, co-authored an important white paper with Professor Faulhaber for the FCC's Wireless innovation Notice of Inquiry.

Highlights from this outstanding paper:

  • "...innovation in the wireless ecosystem is very different from innovation in the Internet. Lessons from Internet innovation must be applied to wireless innovation judiciously, with due respect for these differences."
  • "The Federal Communications Commission has a long tradition of keeping hands off wireless (and the Internet) while ensuring it remains competitive. The results of this policy are evident: the most innovative industry in the US and the world, with lower prices, more usage, and more innovation. In fact, the competitive market has lifted the US from being a wireless laggard compared to Europe and East Asia, and the US is now recognized as the leader in the wireless industry (Strategy Analytics (2009)). The FCC has allowed the competitive market to work its magic, and that is exactly what it has done. As it turns out, that policy has indeed been customer-centric. Customers are in the driver’s seat; when they want better handsets, manufacturers, sometimes in collaboration with network provider partners, innovate. When they want more bandwidth, carriers innovate. When they want more applications, developers (and the other segments) innovate.
  • "Are there policies the FCC can adopt to foster the deployment of 4G and future technologies? What are they? Yes, yes, yes there is a clear and simple policy the FCC can adopt to foster wireless broadband: auction off much more licensed spectrum."
  • "A competitive market imposes the discipline on firms to meet their customers’ demands. Regulators and government bureaucrats can certainly impose discipline by law, but is this what customers want? If the FCC were truly customer-centric, it would let customers decide what they want. It would recognize that its job is to enable customers, not to tell customers what they ought to want." [Bold added]

  • "Different carriers will adopt different network management strategies; provided customers are informed (see below) as to what their carriers are up to, they can make informed decisions about which carriers will get their business. Network management that is too restrictive, perhaps anticompetitive, will be punished by customers. Likewise, network management that is too lax, that permits outages and dropped calls because of congestion will also be punished. Again, let the customer decide what level of network management they prefer. And again, we expect different customers will make different choices. What we know for sure is that this is not a choice government bureaucrats should be making for customers." [bold added]

  • On conclusions in Chairman Genachowski's Open Internet speech: "In asserting that network neutrality in the wired and wireless ecosystems was necessary to preserve innovation, there was not one shred of evidence adduced that shows innovation is being harmed." [Bold added]

  • "The Chairman’s assertions that this does not constitute regulation of the Internet is also beyond credible: imposing constraints on carrier pricing (zero charges on application providers), on carrier product differentiation (no expedited service), and on how carriers are permitted to manage their own networks certainly sounds like regulation. Even worse, adopting “reasonable” network management as a rule introduces great uncertainly into the market; exactly what behaviors will incur the wrath of the regulator? Don’t know; we’ll punish you when we see it. If ever a policy was designed to increase cost, reduce customer choice, reduce incentives to innovate and reduce incentives for carriers to invest, this would be it." [Bold added]

  • "There is no market failure here; if the FCC wants to mandate business models and impose costs and eliminate customer choices the FCC should not cloak it in the language of efficiency and innovation."

  • "Our position is crystal clear: let customers decide what they want and need."

  • "We conclude by stating that innovation will best thrive with a customer-centric FCC policy of ensuring that competitive markets continue to flourish, spectrum is made available and transparency is assured. Regulatory interventions into markets without rigorous justification can only raise costs, reduce customer choice, reduce incentives for investment and reduce incentives for innovation."

    Precious pearls of wisdom the FCC would be wise to heed. Kudos to Professors Farber and Faulhaber!