Net Neutrality

For those interested in municipal broadband overbuilds and their effect on competition, please read my latest Daily Caller op-ed: “Government Broadband Overbuilds Are Anticompetitive.”

• This is Part 5 of my Big GoverNet research series.

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Big GoverNet research series:

Part 1: Cities learning there is no wireless “free lunch” [9-20-07]

Part 2: Why the Australian “Fiber Mae” Broadband Model Doesn’t Work for the U.S. [5-13-09]

Part 3: Why Broadband is not a Public Utility [8-21-09]

Please view this four-minute video by Mike Wendy where I explain what to expect from the D.C. Court of Appeals decision in Verizon v. FCC.  

I explain:

• Why there won’t be much change for consumers as a result of the decision;
• Why Title II reclassification is very unlikely;
• Why neither side is likely to appeal to the Supreme Court; and

• Why there is a chance for more reasonable cost sharing of Internet infrastructure costs that would be to the benefit of consumers.

Thanks to Mike Wendy for the video.

Netflix’ defensive reaction to the Appeals Court Verizon v. FCC decision in its recent shareholder letter speaks volumes about Netflix’s unique and extraordinary net neutrality regulatory arbitrage. It also begs much more scrutiny.

This analysis exposes: how deceptive Netflix has been to its investors about its regulatory risk; how critical Netflix’ misrepresentation of net neutrality to investors has been to its entire economic model; and how relatively wasteful and irresponsible Netflix is in its utilization of the Internet’s bandwidth.

Yet another major obstacle to net neutrality activists’ call for the FCC to reclassify broadband as a common-carrier service is the President’s 2011 Executive Order on “Improving Regulation.”

By way of background, just weeks after the FCC passed its Open Internet Order (3-2) the President issued Executive Order 13563 “Improving Regulation and Regulatory Review.”

Recently the leading public voice of Title II reclassification of broadband, Harvard Law Professor Susan Crawford, asserted “All the FCC has to do is change their mind and say, ‘We got it wrong.’ [The FCC] has ample political congressional authority to do that, this is just a political battle. The FCC is concerned that if it acts to carry out this administrative relabeling, it will lose half its budget and half its staff.”

The FCC did not get it wrong. Professor Crawford and supporters of reclassification have it all wrong.  

There are three key problems with Professor Crawford’s reclassification position:

For those who want to hear some of the best arguments and rebuttals for/against Title II reclassification of broadband, please listen to the 13 minute back-and-forth between Professor Susan Crawford and I today.

• Harvard Law Professor Crawford is the leading proponent for common carrier regulation of broadband.
• Click here for the audio stream.

It’s a good precursor of the debate ahead. 

• It is also part 8 of my Title II Reclassification Research Series

Title II Reclassification Series

FOR IMMEDIATE RELEASE

January 14, 2014

Contact:  Scott Cleland 703-217-2407

Court Upholds FCC’s “General Authority to Regulate” Broadband in Verizon v. FCC, But Denies FCC Authority to Impose Common-Carrier-like Regulation of Broadband.  This win-win, Could Settle into a de Facto Net Neutrality Peace, if Parties Don’t Appeal

WASHINGTON D.C. – The following quotes addressing the D.C. Circuit Court of Appeals, Verizon v. FCC decision may be attributed to Scott Cleland, Chairman of NetCompetition:

Net neutrality activists’ criticism of AT&T’s new freebie for consumers called Sponsored Data is nonsensical.

AT&T’s pricing innovation creates a new freebie for consumers and a new freedom for web providers of Internet content, apps and devices that is fully in keeping with any reasonable notion of a free and open Internet.

AT&T’s Sponsored Data offering is no different from other business freebies offered to consumers to market and competitively differentiate their businesses like: Amazon’s free shipping and free Kindle wireless service; Apple’s free messaging and video conferencing; Google’s free Search, Fiber, Maps, Mobile Operating System, and video conferencing offerings; or Yahoo’s free email. A full list of all free and open Internet consumer freebies would be endless.

AT&T’s Sponsored Data innovation is no different from sponsored ads, website sponsors, content sponsors or any other kind of Internet sponsor.

It is nonsensical for net neutrality activists to not be open to yet another free web service. On what reasonable basis is a consumer freebie from AT&T different than a consumer freebie offered by any other competitor in the Internet ecosystem?

A new European study from Britain’s Office of Communications tries to argue that the EU’s wireless regulation approach is better than America’s. The New York Times’ clever headline on the report sees right through it: “Europeans pay less for mobile use, but at a cost."

In Europe, regulators regularly lower prices and roaming rates for political purposes, ignoring the market economics or economic sustainability of their regulatory approach. The EU’s politics-of-the-moment interest in lower prices, based more on operating costs than total costs that fund long-term investments in infrastructure, ultimately harms consumer value.