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Debunking NN Myth #3

The nuetrality-ites are hiding behind the premise that NN regulation is warranted because its a telco-cable duopoly with 98% share; they believe this means there is market failure warranting government price regulation.

This is very lame and misleading analysis.

First, the expert agencies: the FCC the Department of Justice Antitrust Division, and the Federal Trade Commission all disagree with the NN assertion that the broadband market is not competitive and hence warrants regulation. 

Second, the duopoly assertion ignores the context which is highly relevant. While dial-up was essentially a monopoly, the 1996 Telecom Act addressed that by encouraging competition. Cable modems were a new market and cable created massive competitive pressure on dial-up and on DSL which was forced to lower its prices to attract customers. This Market is not a duopoly, it is a very dynamic market that is in successful transition from a monopoly eleven years ago to a competitive market today.  

NN defeated in Senate Commerce Committee

The Snowe-Dorgan net neutrality amendment failed 11-11.

I just released the following statement to reporters.

Industry Expert Applauds Senate Commerce Committee Vote
Scott Cleland, host of, calls for full Senate to vote against net neutrality

The chairman of commends the Senate Commerce Committee’s responsible handling of the net neutrality issue and urges Senate leaders Frist and Reid to bring the telecom reform legislation to the Senate floor soonest to enable the full Senate to vote on these important issues.  

Debunking NN Myth #2

My friends Paul Meisner of Amazon, and Chris Libertelli of Skype-eBay, whom I personally respect, regularly say NN is not about philosophy in their frequent public defenses of the Net Neutrality. That may be nice and self-reassuring PR mantra, but it does not withstand scrutiny.  

I most respectfully have to disagree with Paul and Chris on this; net neutrality is the classic and central philosophical debate of the techcom era. 

NN is just a techcom version of the constant American struggle between the dual American political values that Americans hold dear: freedom and equality. When issues such as NN put these values in conflict, taking away commercial and individual freedoms to create net equality, it is a philosophical debate. Conservatives and Republicans tend to favor protecting freedom over promoting equality. Liberals and Democrats tend to favor promoting equality over protecting freedoms. 

Debunking NN Myth #1

In my debates on NN I run up against some myths that net neutrality-ites have popularlized. I plan to knock them down one by one over time.

Myth #1: Net neutrality is the way it has always been and NN proponents are just asking for a maintenance of the status quo.

That is only partially true and it gets less and less true every day. That's becuase NN was a monopoly era policy that is being phased out and made obsolete by the emergence of broadband competition. In other words, NN is a vestige of the dial-up world that will continue to phase out as people upgrade from the dial-up slow lane to the broadband fast lane. The FCC, supported by the Supreme Court, ruled that broadband could not be a monoploy market, becuase it was nascent and competitive market. 

Net Neutrality's Pre-cognition

Last week someone analogized net neutrality to the world in the popular movie "Minority Report" with Tom Cruise. (I apologize for not remembering who shared this dead-on analogy with me, thank you whoever you were.) In the scary future-world depicted in Minority Report, "pre-cognition" technology, i.e. mind-reading technology, enabled the Government to know if people were "thinking" of breaking the law before they actually did. This way the Government could intervene and "jail" the offender before the offense occurred! That's freedom for ya!

Microsoft's Double Standard

Microsoft is announcing today a new big initiative to enter the broadband business phone market to offer unified voice-data communications in competition with broadband providers. Reporters should ask if this means net neutrality would apply to them as new broadband competitors? Their answer should be an entertaining dance on the head of a pin.   

It is important to remember that Microsoft successfully lobbied the FCC a couple of years ago for de-regulatory decisions to let them enter traditional communications on an un-regulated basis.  

Had a Great debate with Amazon's Meisner on PBS' Newshour

For those of you interested in what I think is the best and most succinct debate yet on NN, I suggest you listen to the audio of the 10 minute debate between Paul Meisner of Amazon and I  last night on the PBS News Hour with Jim Lehrer. They fairly set up the debate and then let Paul and I very freely and openly debate.

One thing that was new, was that I was able to debunk one of Paul's key points, that since it is the customer that would order video over the Internet, it isn't Amazon's fault or cost to pay for any of the delivery. I explained why that was a spurious argument. It would be like saying, Amazon has a huge parking lot holding a large fleet of very heavy trucks and equipment and because it was the customer that called and asked for Amazon to dispatch the trucks and heavy equipment to drive on the road, Amazon had no role or responsibility for the wear and tear that the heavy trucks had on the road -- just because they didn't dispatch the truck!  Puuuuhleeeeez!

That is just one of many NN arguments that doesn't hold up to scrutiny.

NN Presidential Politics?

I really enjoyed this New York sun article on Clinton, Other Hopefuls Reach For Netroots
URL: .  It appears that NN is the politically expedient position for democratic political candidates who want and need to raise beaucoup bucks from the Internet. The old adage is true, if you want honey don't kick the beehive.

NN clearly is not a "New Democrat" position. Sad the Democratic Presidential candidates are going back to Old Democrat ways, but that is typical of the pre-primary cycle.

Munis in NN Crosshairs?

Today's WSJ had a very interesting article on how municipalities are seeking to offer free city-wide WiFi broandband servce to their residents paid for by advertising. Hello? It appears as if municipalities around the country have not connected-the-dots of the Snowe-Dorgan NN bill could effectively outlaw that business model in serving consumers becuase it would be discriminatory. Municipalities might consider weighing in on Snowe-Dorgan so the hand of BIG GOVERNMENT does not ban their nascent innovative efforts.

The Snowe-Dorgan bill is so breath-takingly indiscriminate and sweepingly hyper-regulatory that it regulates anything remotely broadband. First, in a fit of hubris, Snowe-Dorgan, even legally defines the word "user" for the first time, which even the hyper-regulatory House Markey Bill did not deem necessary! Why are they defining "users" unless they want to regulate them too? 

Eleven years of legal uncertainty!

One of the biggest reasons NN would be a disaster to implement is that no one can define it --meaning it would be left to the courts to do so -- which can take eleven years! Late last week the DC Court of Appeals finally upheld for the first time the FCC's unbundling rules stemming from the 1996 Telecom Act. It took the FCC four attempts over eleven years to craft rules implementing the 1996 Telecom Act's unbundling rules.

Why is this a big issue for NN? First the House Markey and Snowe-Dorgan bills were drafted very similarly to the section 251 of the Telecom Act, which created so much legal uncertainty.