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FCC affirming no NN for wireless broadband cements dereg precedents

The most important development for a free market Internet in the last several weeks was the FCC's  5-0 decision March 22nd to declare wireless broadband an unregulated information service.

  • In laymans terms, the FCC officially and unanimously declared that net neutrality is NOT required for wireless broadband going forward. 

Why is this a big deal?

  • The FCC legally cemented the policy precedent of regulatory parity -- for broadband de-regulation.
    • The FCC applied the Supreme Court's seminal "Brand X" de-regulatory ruling that declared cable modems an unregulated info service (2002) -- to all other mainstream broadband facilities, DSL (2005), BPL (2006) and now wireless broadband (2007).      
    • The legal facts of the FCC reiterating the same policy and technology parity logic repeatedly over several years creates a powerful phalanx of deregulatory legal precedent that future regulators will be hard-pressed to reverse piecemeal.
  • If a future FCC Chairman, say a Commissioner Copps in a potential Democratic Administration, wanted to apply Carterfone-like regulations to only wireless, that FCC ruling would likely be ruled in court to be arbitrary and capricious because it singled out wireless and treated that broadband technology much differently than other analogous broadband technologies: cable modem, DSL and BPL.
    • To be fair and legal, the FCC would have to apply new regulations in a technologically-neutral way.
  • What the FCC decided is that wireless is NOT different in a policy or legal sense.
    • This makes it much harder to legally and politically justify any eBay-Skype petition for Carterfone rules for wireless.
    • The savy observer will appreciate that this FCC ruling effectively moots the eBay-Skype petition to apply Carterfone rules to wireless.
      • I fully expect people will continue to talk about wireless Carterfone rules.
      • However, when they have to talk about it in the context of the FCC's Notice of Inquiry into NN, they will find it extremely difficult to justify that wireless is different and requires special rules.

Well done FCC!  Great de-regulatory box out!

The U.S. is way ahead of Europe on broadband!

Only 40% of European Union homes have Internet access and only 16% have broadband, according to EC Consumer Protection Commissioner Meglena Kuneva who spoke yesterday at the Digital World Conference in Berlin.

  • Those lagging numbers are in stark contrast to America's performance where 70+% of American homes have Internet access and 45+% have broadband according to FCC data.

NN proponents have tried to manufacture that there is a broadband crisis in the U.S. and that we are falling behind the rest of the world. It just isn't true.

  • That's why I wrote the commentary "America's Unique Internet success" in the Washington Times a couple of weeks ago, in order to debunk this fabrication designed to create a reason for the Government to intervene in the broadband marketplace.
  • America has a great broadband policy and strategy -- its called competition and deregulation!
    • And it works!
      • The Internet is the single greatest deregulation success of all time.
      • And the U.S. has substantially more facilities-based broadband competition than any other nation in the world.

Europeans see NN as away to undermine U.S. Competitiveness

Net neutrality is not only a domestic issue but also a policy weapon some Eurocrats see as a way to undermine American competitiveness to Europe's advantage.

  • Make no mistake, NN has a powerful competitiveness, trade and foreign policy dimension.
    • Keeping the Internet free of regulation and promoting competition and the deployment of new technologies are critical to maintaining America's competitiveness.
  • Other nations are begining to see the NN concept as a clever way to slow down U.S. innovation and "level the playing field" through regulation to improve their competitive position relative to the U.S.
    • Some of the more socialist-minded nations like France are beginning to see that they can advance relatively, if they can slow U.S. innnovation down -- with "competition" restrictions that favor the EC and relatively disadvantage the U.S.

Why I wrote my commentary, "America's Unique Internet success" in the Washington Times a couple of weeks ago," was to drive home this important insight that America truly is unique when it comes to the Internet

More disarray in the ItsOurnet coalition?

I read with interest and amusement Drew Clark's piece on GigaOM about "Is Google changing its position on Net neutrality?".

  • My key point is what is Google's official position on Dorgan-Snowe, the highest profile Net neutrality bill which is co-sponsored by Democratic Presidential Candidates: Senators Clinton and Obama?
    • That is what matters. The rest is just backchatter, interesting though it is.

Drew Clark's piece in GigaOM is one of the better reports I've seen outlining the increasing disarray of the ItsOurNet coalition, the front group for online giants promoting net neutrality legislation.

Kudos to Cisco's Pepper on excellent NN editorial in TechNewsWorld

Dr. Bob Pepper of Cisco, and formerly a top policy advisor to several FCC Chairman, wrote an excellent opinion piece in TechNewsWorld: "Network Neutrality: Avoiding a Net Loss". 

  • Why it is a good read is the clarity of thought about how market forces, not regulation, has been the key to empowering consumers and creating freedom of choice.

China reining in Bloggers -- and NN wants Govt to protect free speech?

Reuters is reporting that China's chief censor will tighten control of bloggers in China.

NN proponents in the U.S. have ignorantly been calling NN the "First Amendment of the Internet."

  • These people clearly have not read the First Amendment or had any history on the origin and motivation behind our wonderful American First Amendment constitutional protections.
  • The First Amendment prevents GOVERNMENT from restricting people's free speech.
    • Our Founding Fathers understood that threats to freedom come from GOVERNMENT not individuals of companies.

I really don't think NN proponents have thought this one through.

Debunking the new U of Florida NN study -- think "Rosanna Rosanna Danna"

A new net neutrality study by an associate professor of the Business School of the University of Florida, bases its entire approach and conclusions on two embarassingly and obviously wrong pillar assumptions. 

  • They have wasted a lot of people's time by not grounding their game theory model on solid ground, but on the quicksand of erroneous assumptions. 

What assumptions did they get wrong? and what is the big deal?

  • The first pillar assumption they got dead wrong can be found in the first sentence of the abstract of their paper: "The Debate on Net Neutrality: A Policy Perspective"
    •  "Whether to legislate to maintain "net neutrality", the current status quo of prohibiting broadband service providers from charging online websites for preferential access to their residential and commercial customers, has become a subject under fierce debate."
      • Hello? The authors don't even know what the status quo is!
      • Why would net neutrality proponents be lobbying for new legislation, if NN was currenlty the law of the land?
      • Obviously these "researchers" did no research becuase if they did they would know that the ~30 million cable modems users have never been subject to net neutrality rules and that the ~225 million wireless users have  not been subject to them since 1993!
      • With a just a teensy amount of research they would have discovered a little Supreme Court case called "Brand X" in summer of 2005 which declared that the FCC had the authority to not apply NN-like rules to DSL. The FCC then referenced that decision a few weeks later in formally rule that DSL was an info service not subject to common carrier-like NN rules.
  • The second pillar assumption they got dead wrong was again in their first sentence in their conclusion section on page 29.
    • "The absence of meaningful competition in providing broadband access to consumers in many areas of the United States makes the broadband provider a de facto monopolist, and therefore the sole gatekeeper in determining what content gets to the end consumer, and in what fashion."
      • Obviously these "researchers" did no research at all, because no credible source argues that broadband is a monopoly in the United States. 
        • The FCC's latest broadband competition report, shows that cable has 44% share, DSL, 36% share and wireless and other have 20% share. It also shows that in the latest reporting period, first half of 2006, wireless broadband represented 58% of all new high speed additions.
          • That FCC report also showed that: 96% of U.S. zip codes that have at least 2 broadband providers; and 87% of U.S. zip codes that have at least 3 broadband providers.
        • If the researchers only turned on their TVs or radios, or read a local newspaper, they would see competing ads for broadband offerings. I guess their are no windows in the University of Florida's "Ivory Tower."
        • Even those most-in-denial-of-the-facts in the NN movement claim a "duopoly" and know better than to assert that the current market is a "de facto monopoly." If they did they would lose any remaining credibility they have.
      • Many professors would fail a graduate student that made such careless and completely unsupportable core assertions to support their model and conclusions.

Lastly, when I was reading this embarrassingly-poorly researched and constructed paper, the image that came to mind was that of the great late commediene, Gilda Radner, playing one of the most famous characters of Saturday Night Live:  "Rosanna Rosanna Danna."

NN relevance of "Police foil al-Qaida net attack"

I wanted to connect the dots for folks of the national security relevance and implications of a net neutrality policy.

So what's the national security connection to NN?

State NN "trend-let" is fizzling -- MD joins MI in rejecting calls for NN; NN is now 0-8!

Net neutrality proponents have been rebuffed ayet gain in trying to push NN at the state level.

  • In Maryland, House Bill 1069, which would have imposed NN in Maryland, was withdrawn Friday for lack of support.
  • As you may remember, a similar attempt to impose NN in Michigan in recent months also failed.

NN state activists are now off to a predictable 0-2 start in trying to get the states to adopt what every entity at the Federal level has already rejected. 

  • To recap the scoring, NN is also 0-6 at the Federal level: FCC, Bush Administration, Supreme Court, full House, Senate Commerce Committee, and FTC. 

Why is the concept of Net Neutrality or net regulation 0-8 in official government forums of all types: legislative -- Federal and State, judicial and executive?

  • The issue has no merit. It is basically a collection of unsubstantiated allegations with near zero evidence or supporting analysis to justify the allegations.
  • It would reverse very successful existing policy promoting competition and keeping the Internet free of regulation for no good reason. 

When responsible and accountable officials hear both sides of this debate in a fair and open forum -- with evidence and analysis of the merits, costs and benefits -- the right answer is consistently obvious -- if it isn't broke don't fix it!

  • Informed, knowlegable, and thoughtful people are the best friends of those opposing net regulation. 

This is the basic reason I organized last April as an eforum to encourage a free and open debate on the merits of the NN legislation.

When change is only constant, why ban it? Read WSJ's lead AT&T-Yahoo article

Today's lead WSJ article "As Power shifts, AT&T may alter Yahoo pact" is a must read.

  • The wonderful lesson of this article is that the only constant in life is change.
    • The article is replete with real life examples with how deals and visions of the future -- made sense at one time -- but "changed" or evolved with the evolution of the Internet, innovation and changing corporate fortunes.
  • The policy lesson from this illuminating article is that it spotlights the complete folly of trying to pass a net neutrality law which would freeze the current architecture and competitive state of play -- permanently.
  • Not only is it nonsensical to get in the way of the Internet's constant and dynamic evolution, but it exposes the human folly of being certain about what the future holds.
    • This insightful article shows how some of the best minds can't anticpate all of the unexpected twists and turns the Internet economy can and does take.

The article also explains the AT&T-Yahoo pact from 2001 which gave Yahoo the "exclusive" to be SBC/AT&T's default webpage and search engine.