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Wireless is the poster child for the good things that happen with no net neutrality

I am just starting to review the FCC's new report on the state of wireless competition but had to blog first on the extraordinary success of net neutrality without net neutrality.

Let me share some remarkable statistics from the FCC's report about wireless.
Since 1994: price per minute fell 86% from 47 cents to 7 cents; subscribers grew 788% from 24m to 213m American users; and American's average monthly bill has fallen from $56.21 to $49.98 despite an explosion in average usage by Americans. What's not to like?

Responding to critics who don't see much competition

I am pleased that critics are reading my latest one-pager on why broadband competition will flourish but not surprised that some of the critics are unmoved. One of  my critics at, Jeff Chester, blogs that I have drunk too much cable-telco kool-aid.

Jeff, I have known you for many years and its fair to say that you and I approach the same set of facts from very different perspectives and world views. You have been a big proponent of heavy government restrictions on business in media and communications and a big skeptic on the value of competition policy. I have been a big proponent of the opposite. We have shared common ground in the past and could in the future over opposition to genuine monopoly power that is unaffected by competition; however that is not the broadband world we live in today.  

Online giants addicted to regulatory arbitrage

In reading the FCC's Press release on the state of competitiveness in the wireless industry, it is obvious that wireless is a competitive industry. Prices fell 22% during 2005 alone from 9 cents a minute to 7 cents. The number of subscribers increased from 185m to 213m. In addition, JD Power reported wireless service quality increased.
So on what basis are the online giants: Google, Yahoo, eBay, and Microsoft arguing that wireless is not competitive? and should be subject to net neutrality regulation for the first time since 1993? Where is the logic, merit or ethic of that self-serving position?

FCC Chairman Martin on the robustness of Wireless Competition

I wanted to highlight FCC Chairman Martin's statement on the FCC's recent report on the competitiveness of the wireless market

The Chairman's summary paragraph is powerful evidence of why the push for net neutrality to be applied to wireless service is so misguided and oblivious to the facts of the marketplace:

"Competition among mobile carriers has lowered the price consumers pay pay for mobile telephone service, stimulating rapid subscriber growth and greater usage of mobile phones. Competition has also encouragd mobile telephone carriers to improve service quality and to begin deploying significantly faster broadband technologies on their networks. The results demonstrate how a competitive marketplace -- rather than economic regulation -- provides the greatest benefits to the American consumer." 

Craig's Twisted Sense of Internet "Fariness"

The Philadephia Inquirer published my letter to the editor today on Net Neutrality. 

With all due respect to Craig Newmark of Craigs List, I had to challenge his one sided and twisted characterization of Net Neutrality "fairness" in his Philadelphia Inquirer Op Ed a couple of weeks ago.

Craig and I have debated through commentary on National Public Radio and I respect his sincerity but disagree wholeheartedly with his point of view.

UC Berkley with close ties to Silicon Valley produces research questioning net neutrality

I wanted to highlight a new academic study that argues that net neutrality could be harmful to consumers, produced by none other than the University of California Berkley's Business School which is well-known for its close ties to Silicon Valley. I guess everyone in the Valley did not get the "memo" so some of its top academics are doing some free and open thinking about Net Neutrality and its potential impacts on consumers. 

The academic study is entitled: The Economics of Product line Restrictions with and Application to the Net Neutrality Debate." I know and respect one of the study's authors, Micahel Katz from when he did this type of analyisis very ably in the real world of evaluating competition at the FCC as their Chief Economist and as a Senior official in the Department of Justice Antitrust Division. His analysis will carry weight with substantive folk that matter because of his outstanding and relevant experience and perspective. 

How is market concentration ok in tech but not broadband?

Industry proponents of Net neutrality come almost exclusively from the tech sector, where there is a well known "first mover advantage" that tends to create "highly concentrated markets" -- if one narrowly defines them like the neutr-elitists do for broadband. 

Interestingly, the tech sector doesn't call for legislation to regulate their own highly concentrated tech markets. Let's review tech markets with their newfound and self-serving definition of market failure, as a market where most of the share is held by two players:

What about the software operating system market? We'll be kind and say Apple makes it a duopoly by tech's definition.

Net Neutrality: "Its a fetish" per Chairman Stevens

I have to give National Journal's Tech daily and Senate Commerce Committee Chairman Ted Stevens (R-AK) the quote of the week award. In talking to reporters today after a brief visit to the PFF luncheon I attended today, Chairman Stevens had this to say about the Net neutrality supporters:

"There's no way you can appease the people" that support net neutrality, he said. "It's a fetish -- it's really something that doesn't exist. But they want to stop this bill because it might exist."

100+ High tech companies oppose Net Neutrality

The recent high tech letter to Senate leaders against net neutrality is very helpful because it shows that many Silicon Valley and high tech companies also oppose preemptive net neutrality legislation.

This letter had a simple clear message: that no Internet regulation has been key to the Internet's success; that "correcting a nebulous concern many have severe unintended consequences"; and that net neutrality legislation could discourage investment  in broadband networks.