Sprint

Please don’t miss my new white paper that I will present Friday at a NetCompetition Capitol Hill event with the following well-known experts responding: Gene Kimmelman of Public Knowledge; Jeff Eisenach of the American Enterprise Institute; Mark Cooper of the Consumer Federation of America; and Hal Singer of the Progressive Policy Institute. (Event details are below for anyone who wishes to attend.)

The white paper -- “Thinking and Starting Anew: Modernizing Communications Law for American Consumers” -- has a simple but critically important premise: that consumers and not technology should be the organizing principle of any update of the Communications Act.   

I believe you will find the two contrasting graphics particularly helpful:

Billionaire Netflix CEO Reed Hastings objects to Netflix having to pay anything at all for Netflix’ gorging on 30% of the Internet’s North American bandwidth. In a Netflix corporate blogpost billionaire Reed Hastings rails against the perceived injustice of Netflix paying Internet usage-based pricing like consumers do.

At core, Mr. Hastings now derides traditional consumer-defined net neutrality, which ensures consumers the freedom to access the legal content of their choice – as “weak” net neutrality.

Meanwhile, he is attempting to rebrand his new self-serving, corporate-defined net neutrality, which ensures the largest corporate users of the Internet pay nothing for their largest usage of interconnection bandwidth -- as “strong” net neutrality.

Mr. Hastings’ position clearly prioritizes corporate welfare above consumer welfare.

With due credit to "Ripley's Believe it or Not!^®," so much odd and bizarre is happening in Washington in the "name" of "U.S. wireless competition criticism” that the topic calls for its own collection of: "Believe it or Not!^®" oddities.

Softbank’s CEO Masayoshi Son, who bought Sprint for $21b in 2013 with public plans “to become the #1 company in the world,” tells U.S. regulators just eight months after he bought Sprint, that Softbank-Sprint cannot compete with either of America’s #1 and #2 wireless providers, Verizon and AT&T, unless Softbank can buy America’s #4 wireless provider -- T-Mobile! 

As the dust has settled from the D.C. Circuit’s January 14^thdecision to vacate and remand the FCC Open Internet Order for another try, and from FCC Chairman Wheeler’s February 19^thstatement accepting the court’s invitation to propose open Internet rules that could pass court muster, what does it all this mean going forward?

First, we need to glean the key separate baseline takeaways from what the court ruled and also what Chairman Wheeler initially decided. Then we need to put them together to glean what the big going-forward takeaways are.

Court Decision Takeaways

Please see my latest Daily Caller op-ed: “The Narrowing Net Neutrality Dispute.”

• It puts the recent positive Netflix-Comcast IP interconnection agreement into the broader net neutrality context.

It is Part 24 of my Broadband Internet Pricing Freedom Series.  

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Broadband Internet Pricing Freedom Series

Part 1: Netflix' Glass House Temper Tantrum Over Broadband Usage Fees [7-26-11]

Part 2: Netflix' Uneconomics [9-6-11]

Anyone interested in broadband policy should not miss the excellent new research of Roslyn Layton, an AEI Internet economist, who has studied European broadband progress as compared to America’s.

Let me flag two big research takeaways that should not be missed.

• “… per capita [broadband] investment in the U.S. is twice that of Europe, and the gap is growing.”
• “Then there is the claim that Americans pay more for broadband than Europeans. As I point out in my report, critics forget to include the impact of value added taxes (as high as 27% in some countries) and compulsory media license fees (adding hundreds of dollars per year to the cost of every broadband subscription). When accounting for these real differences, Americans pay less for broadband.”

These findings affirm the wisdom of America’s market-led broadband policy that encourages facilities-based broadband competition over the EU’s lagging, common carrier, monopoly-unbundling, approach to broadband.   

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]

FOR IMMEDIATE RELEASE January 31, 2014

Contact:  Scott Cleland 703-217-2407

WASHINGTON D.C. – The following quotes addressing Chairmen Upton & Walden’s requests for input on modernizing the Communications Act may be attributed to Scott Cleland, Chairman of NetCompetition:

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.