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FCC's concluding market power in the wrong place; See great ACI analysis: Broadband vs Internet profits

Given that the apparent justification for new formal net neutrality rules is that fifteen-year policy has failed and that the market is unable to ensure consumer choice, the FCC will need to justify with facts that broadband providers indeed have market power to exercise anti-competitively.

Kudos to Larry Darby of the American Consumer Institute for his excellent and illuminating comparative financial analysis of the market power and profits of broadband companies vs. Internet companies. From his post

The Many Vulnerabilities of an Open Internet

What an "Open Internet" does not mean is as important as what it does mean.

  • Surely an "Open Internet" is not intended to mean what it certainly can mean: un-protected, unguarded, or vulnerable to attack. 

  • Thus, it is essential for the FCC to be explicit in defining what the terms -- "Open Internet," "net neutrality," and Internet non-discrimination -- don't mean, as well as what they do mean.

The word "open" has 88 different definitions per and the word "open" has even more different connotations depending on the context. While the term "open" generally has a positive connotation to mean un-restricted, accessible and available, it can also have a negative or problematic connotation if it means unprotected, unguarded or vulnerable to attack.  

    Wireless Innovation Regulation -- "Believe it or Not!"

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

    Skype co-founder Niklas Zennstom, the co-founder of illegal-music-downloading site Kazaa, who had to avoid entering the U.S. because of copyright-infringement liability... is now seeking a U.S. court injunction to shut down eBay's Skype for alleged copyright violations!

    A "Judge Greene" of the Google Book Settlement? -- Handicapping the process' four outcomes

    There's been scant analysis of how the Google Book Settlement process has been altered going forward given recent major developments:

    • The "hornet swarm" of objections to the Google Book Settlement, and 
    • Google's recent preemptive concessions on:
    • To date the discussion of outcomes has been largely binary, will Federal District Court Judge Chin approve or disapprove the proposed Book Settlement?

    Top Ten Pitfalls of Wireless Innovation Regulation

    Analysis of the potential pitfalls of wireless innovation regulation is a necessary complement to the FCC's upcoming Notice of Inquiries into wireless competition/innovation and the DOJ's review of wireless competition, in order to ensure policymakers get a balanced view of the big picture.  

    What are the Top 10 Pitfalls of Wireless Innovation Regulation? 

    #1 Pitfall: Losing focus on universal broadband access.

    "Wireless innovation" appears to be the latest rebranding iteration of "net neutrality" and "open Internet" as the net neutrality movement searches for more mainstream support of their views. 

    Ironically Zittrain's "Lost in the Cloud" emphasizes three of my big concerns/themes

    Jonathan Zittrain's NYTimes Op-ed today, "Lost in the Clouds" ironically captured three of my big concerns/themes about the Internet and its natural outgrowth -- cloud computing.

    • I recommend this op-ed because it pulls together a whole host of converging Internet issues that others generally treat separately.
    • The problem with writing about these issues separately is that much of the richness of how these inter-related issues interact -- is lost.  

      Zittrain: "The cloud, however, comes with real dangers."

      • I agree. That has been much of the point of my 13 part series since the first of the year:
        • "The Open Internet's Growing Security Problem"

      Zittrain: "Worse, data stored online has less privacy protection both in practice and under the law."

    Non-neutral Ironies of Amazon Blocking Kindle Content

    Amazon's decision to seize e-copies of George Orwell's "Nineteen Eighty Four" and "Animal Farm" from Kindle users after Amazon had sold and already delivered the e-books to customers -- drips with irony. 

    • For those who have missed the widespread uproar over Amazon's actions see NYTimes or Google "Amazon 1984." 

    Irony #1: Fans of George Orwell's political satire know that Animal Farm is all about animals who originally profess equality for all the farm animals, but once in power become corrupt and establish rules that make those in power much more equal than others. 

    "Privacy is Over" -- Part VIII Privacy-Publicacy Fault-line Series

    "All our information is being sucked into the cloud. Privacy is over." That was the bold declaration of Attorney Steve Masur at DCIA's P2P Media Summit per Washington Internet Daily.

    • Wow. As stark an assessment that that is, what really disturbs me is the thought process and tech ethic that underlies this view.
    • Mr. Masur is not alone, he is part of a growing publicacy mentality/movement that looks at privacy as:
      • A neandrethal expectation in the Internet Age,
      • Buzz-kill for Internet innovators, and
      • Road-kill for the cloud-computing bus speeding down the information super-highway.

    My pushback here is the blind worship of technology or tech-determinism.

    • I define tech-determinism to be:
      • if technology or innovation can do it, it must be good; and
      • if something stands in the way of technology and innovation, like privacy, it is in the way and should be terminated. 

    Did it ever occur to the tech determinists that if there is no privacy in the cloud, many won't go there?

    • Most users appreciate that technology should work for them, they don't work for technology.

    Privacy isn't over. 

    Is Some Internet Competition Devolving?

    "eBay Retreats in Web Retailing," the WSJ top story today, suggests some Internet competition may be devolving. 

    What does it mean that eBay has decided to retreat from competing in web retailing against Amazon and other online retailers of new goods, in order to focus on:

    • Selling secondary-market/used goods, and
    • Brokering overstocked, clearance, or out-of-season goods? 

    First, it is a stark reminder of the Internet's unbeatable network effects where the strong tend to get stronger and the weak tend to get weaker.

    Defending Amazon Kindle’s Reasonable Network Management

    To offer its innovative and property-protecting e-book/e-newspaper Kindle service, Amazon engages in reasonable network management of its Amazon-branded Whispernet wireless broadband access service.

    • Amazon’s Kindle service blocks consumers’ access to all content that does not have a commercial relationship with Amazon, and it does not allow open, neutral or non-discriminatory access to the content of consumers’ choice on its leased network.
    • Amazon’s network management is reasonable because it enables the offering of an innovative, secure, quality, affordable service for consumers.
    • Amazon’s unfettered freedom to choose the business model that best suited the Kindle was central to Amazon’s breakthrough innovation.        


    Important questions:


    First, is “closed” innovation out-performing?