A nation divided cannot stand.

America’s Internet policy is so badly divided that America’s national security struggles to stand firm.

The U.S. Government’s outdated, out of control, Internet policy dictates digital division and delivers digital disunion and disorder.

Abraham Lincoln’s most famous speech shared the timeless truth and wisdom that “a house divided against itself cannot stand” when he stood up for what was, and is, right – freedom and equality for all people, not just for the favored.  

Much more than most appreciate, U.S. Internet policy has de facto partitioned America legally into separate online and offline worlds. That may have made sense in the 1990’s when the Internet was nascent, but now when the Internet is pervasively everywhere we live, work, and play, it’s not only “disruptive,” but divisive and destructive too.

Having a Wild West U.S. Internet policy -- that legally partitions Internet companies and activities to be largely above and outside normal Government accountability, law enforcement, and national security -- creates an increasingly divided nation, where government favors the anything-goes worst of ourselves on the virtual Wild West Internet, at the direct expense of the best of ourselves in civilized America.    

The State of Our Digital Disunion and Disorder

SUMMARY

What could possibly go wrong with a nationalized, dual-use, military-civilian, secure 5G wireless network to centralize all military and civilian U.S. transportation traffic control and management with Alphabet-Google as the only commercial wireless ISP “financing/anchor tenant?” Way too much.

Per Axios reporting, National Security Council Staff apparently have a network vision for a secure 5G wireless network for the U.S. military, that is ultimately capable of C3I (command, control, communications, and intelligence) of the “total situational-awareness,” necessary for the 21^st century, “Internet of the Battlefield” of integrated, autonomous warfare of vehicles, drones, and robots. The unclassified NSC plan envisions four “financing/anchor tenants:” U.S. Air Force, General Services Administration (GSA), Alphabet-Google, and Wells Fargo.

FOR IMMEDIATE RELEASE, January 29, 2018, Contact: Scott Cleland 703-217-2407

The Primary Beneficiaries of America Nationalizing a 5G Wireless Information Highway Would Be: Google’s Monopoly Information Access, Android Mobile Operating System, & Google Maps/Waze; and SoftBank’s ~$60b holdings in China’s Alibaba & $100b Telecom/Tech Venture Fund

WASHINGTON D.C. – The following may be attributed to Scott Cleland, Chairman of NetCompetition:

“An analysis of the Axios-reported memo proposing to build a nationalized 5G wireless network makes it clear that Alphabet-Google and SoftBank are the moving force behind it. The proposal obviously would benefit their interests first and foremost and it goes in the exact direction they have lobbied for over the last several years.”

“It is especially ironic and troubling that Softbank and Alphabet-Google are the apparent impetus behind this proposal for a secure wireless transportation network to compete with China and be secure from Chinese snooping.

That’s because Softbank is one of earliest and biggest shareholders of Alibaba, China’s government-chosen, dominant ecommerce site,” and Google is increasingly cooperating with China’s limits on freedoms, to gain more business in China, especially in the arena of artificial intelligence -- a most sensitive area of national security technology transfer” -- by recently launching an artificial intelligence center in China.

Internet users are the forgotten consumers.  

They have been forgotten for over twenty years because America’s Internet policy has been tech-first-consumer-last. 

Hiding in plain sight, U.S. Internet policy prioritizes what’s best for technologies and Internet companies over what’s best for people, because at core it assumed in 1996 and 1998 that whatever is good for Internet technologies and companies is good for Internet consumers.

For many years that appeared to be largely true. However, the cascading revelations this past year -- big societal, economic, and political problems caused by Google, Facebook, Amazon, Twitter, etc. -- prove that core U.S. Internet policy assumption false.

Let’s contrast the Government’s protection of Internet companies with its protection of Internet consumers.

How U.S. Internet Policy Maximally Protects Internet Companies

It’s long been U.S. law and policy to protect only Internet companies from competition, regulation, negligence liability, taxation, anticompetitive behavior, and paying for public Internet infrastructure. Consider:

1.      The 1996 Telecom Act protects Internet companies from legacy FCC regulations that their competitors must obey.

2.      It establishes a national policy that only Internet companies are to be “unfettered by Federal or State regulation.”

Please do not miss my latest Daily Caller op-ed: “BREAK UP GOOGLE: There Is A Solid Conservative Antitrust Case Against Alphabet-Google.”

Only three online intermediary platforms command bottleneck distribution control of ~90% of online demand and ~90% of offline supply, with gatekeeper access-power over users and toll-keeper pricing-power over suppliers. They are: Google in information/data; Facebook in social sharing; and Amazon in commerce.

It is no coincidence that the all the monopolizations in the American marketplace today exclusively involve online intermediary platforms; and that they are happening in the only country in the world with a longstanding official, Internet-first industrial policy, that specifically advantages the intermedia companies with permanent blanket protection from competition, regulation, and liability.

How did Google, Facebook, and Amazon become de facto government-sanctioned monopolies?

Well intentioned U.S. Government policy in the 1996 Telecom Act has massively distorted free market competition between online intermediaries and all other companies with outdated and now extreme asymmetric regulation that implicitly favors intermedia monopolization over market competition.

Internet-first industrial policy from 1996-2018, has granted online intermediary platforms unbeatable relative competitive advantages and special policy privileges, that de facto heavily-prioritize the commercial interests of Internet companies over the interests of everyone else.

This quarter EU antitrust authorities are expected to rule that Google is illegally dominant in the markets for licensable smart mobile operating systems and app stores for the Android mobile operating system, because Google evidently abused its dominance by contractually requiring Android device manufacturers and mobile network operators to install only Google search and make it the default search engine.

Importantly, this expected EU Android ruling occurs in the context of the EU’s seminal antitrust decision last June that: 1) ruled Google’s search services were dominant; 2) ruled Google abused that dominance by giving illegal advantage to its own comparison shopping service; 3) fined Google a record $2.7b; 4) imposed a cease and desist order on Google to stop this illegal behavior in 90 days (or face additional fines of up to 5% of Alphabet’s revenues); and 5) imposed a remedy that requires that rival comparison shopping services get treatment equal to what Google provides itself, a requirement that Google apparently has not been respecting.

What this all suggests is that the next ruling, fines, and remedies that the EU will consider in the Android case, are likely to be more adverse to Alphabet-Google’s business and model than the previous one.

Google’s strategic actions over the last two years confirm tougher EU outcomes are ahead for Alphabet-Google. Lets consider that evidence.

Just like poker players read other players “tells” for what they really think of the hand they are holding, Google has had three big “tells” that expose that Google is much more worried than they are letting on about the hand they hold in the EU antitrust process.

In 16 minutes I overview for you why there is a woefully incomplete understanding of the U.S. Internet’s three “Standard Oil-like” monopolizations (Google, Amazon, and Facebook) and the four cartelization dynamics these three monopolies have collectively spawned. I also spotlight why there is virtually no understanding of the root cause of these artificial and anticompetitive outcomes. Please see this link to a video (2:30-19:05) courtesy of The Capitol Forum and CQ’s Fourth Annual Tech, Media, and Telecom Competition Conference on December 13, 2017.

My remarks at this conference summarize and expand on my White paper entitled: “America’s Antitrust Enforcement Credibility Crisis: America’s three enduring intermedia monopolies and four market cartelizations are a result of lax, asymmetric antitrust law enforcement & America’s anticompetitive Internet-first industrial policy.”

I explain that America has not had out-of-control monopolizations and cartelizations like this since the 1880s and that these Internet intermediary platforms – Google for information, Amazon for commerce and Facebook for social sharing – are not free markets or competitive platforms, but more accurately economic bottlenecks, central planners, and algorithmic allocators.

For about a half of the U.S. economy the “invisible hand” of the free market, has been supplanted effectively -- via government Internet-first industrial policy -- to the non-transparent, unaccountable, and anticompetitive “algorithmic hands” of Google, Amazon, and Facebook.

For a neutrality or non-discrimination principle to have legitimacy, it must be applied neutrally and non-discriminatorily itself, because everyone knows true neutrality means not taking sides.

Non-neutral application of a net neutrality policy takes sides and thus is discriminatory and unfair, the exact opposite of net neutrality’s purported purpose and the definition of its signature word.

Arguably, most all the controversies and conflicts over net neutrality for the last fifteen years have resulted from a supposed neutrality principle applied non-neutrally, to favor Internet intermediary distribution networks like Google, Amazon and Facebook, and cloud computing networks, like Amazon, Microsoft and Google, over legacy communications and content networks.

Today the FCC, in voting 3-2 for the Restoring Internet Freedom Order, is legitimately implementing net neutrality in a neutral fashion, i.e. treating similar information services similarly with the same light touch, under the same market transparency enforcement oversight at the FTC, and not taking sides by non-neutrally, picking winners and losers from the start.

Kudos to the Pai FCC majority for: reversing the Wheeler FCC’s 2015 unfair policy of discrimination and digital division -- treating similar services dissimilarly; restoring the FCC’s role as a neutral arbiter; and applying a neutrality principle that effectively treats similar services similarly, via the most transparent FCC rulemaking process ever.

Below is the abstract of my new antitrust white paper, which can be accessed in full here.

I will present it at the Capitol Forum CQ 4^th annual tech competition conference in New York City Wednesday on “Obstacles to Antitrust Enforcement.”

It is also a timely and relevant addition to the Senate Judiciary Antitrust Subcommittee hearing Wednesday in Washington D.C. on “The Consumer Welfare Standard in Antitrust: Outdated or a Harbor in a Sea of Doubt?” because it discusses how the Chicago School antitrust consumer welfare standard remains sound as is, but warns that its application to Internet intermediary platforms is being badly distorted by America’s Internet-first industrial policy and its longstanding Internet competition double standard.

Many will find the 27-page white paper with >150 cites, a very helpful, up-to-date, overview and fact set on the current badly troubled state of competition and antitrust in the marketplace today.

A White Paper

America’s Antitrust Enforcement Credibility Crisis

America’s three enduring intermedia monopolies and four market cartelizations are a result of

lax, asymmetric antitrust law enforcement & America’s anticompetitive Internet-first industrial policy

December 13, 2017

By Scott Cleland: President of Precursor LLC & Publisher of GoogleMonitor.com & Googleopoly.net