The Big Unanswered Net Neutrality Questions

The latest debate over net neutrality regulation in the House Judiciary Committee today spotlighted for me three big fundamental questions that the FCC has still not answered.

  1. If the alleged net neutrality problem the FCC claims to be trying to solve in the Open Internet Order was so incredibly urgent to put in place in December, that everyone's holiday plans at the FCC had to be disrupted, why is the publishing of the rules in the Federal Register happening at such a leisurely, anything-but-urgent, pace?
  2. When the law of the land has a clear national policy bias "to promote competition and reduce regulation," how does the FCC legally justify an FCC Open Internet policy bias to promote regulation and reduce competition?
  3. How can the FCC use an obviously de-regulatory, pro-competition provision of law, Section 706, to legally justify an obviously regulatory de-competition Open Internet Order?

Google's Anti-Management Bias Problem

In a remarkable admission for a senior public company executive, Google Chairman and longtime former CEO Eric Schmidt told Gigaom: "At Google, we give the impression of not managing the company, because we don't really. It sort of has its own borg-like quality if you will. It sort of just moves forward."

If the executives ultimately responsible for "managing the company" to ensure it proactively respects users' privacy, vigilantly guards against security and data breaches or property infringement, is not really "managing the company," it now makes sense why Google has so many privacy scandals, and security and property infringement problems.

Generally protecting privacy, security and property rights are not engineering goals unless company management and managers have internal control and management focus, systems, processes, and procedures to ensure they are a priority to engineering teams.

Google's lack of interest in management execution is evident in Google's:

 

New Evidence Increases Google's Antitrust & Privacy Risk

New "smoking gun" incriminating and damaging evidence from court documents in the Skyhook vs. Google court case, likely increases Google's antitrust and privacy risk on multiple fronts. (For background on the Skyhook case see here, here.)

A must-read piece by Mike Swift of The Mercury News, details how, in May 2010 just after the WiSpy scandal broke, Google's Larry Page (who is now CEO), had an email exchange with senior executives that made clear how strategically important building a WiFi location database was to Google's Android and mobile strategy.

 

  • This new "smoking gun" evidence has very broad and serious implications for many different antitrust and privacy investigations into Google because it shows Google's senior leadership were fully aware of what the company was trying to accomplish in its WiFi location database efforts, and more importantly, it confirms Google's strong business motive and intent to more aggressively to dominate WiFi location services.

 

Implications of the new evidence:

Antitrust:

Google WiSpy II & Privacy Scandal #11 vs. Apple's Respect for Privacy

The current media and Congressional interest in the new revelation that Google and Apple have collected WiFi location information has largely missed an exceptionally salient point -- Google and Apple have very different privacy track records stemming from their very different attitudes toward privacy.

Google Privacy Scandal #11:

AT&T - T-Mobile in Competitive Perspective

As the DOJ and FCC research and sort through the competitive facts of the AT&T-T-Mobile acquisition for themselves in the months ahead, it will become clear that opponents' current rhetoric and assertions are over-the-top, exaggerated and simply not credible.

  • FreePress and others' claims that this transaction will enable AT&T to "monopolize everything" and reconstitute the "Ma Bell Monopoly," are political demonization arguments devoid of evidence; they are designed to discredit U.S. competition policy, demonize free markets, and justify new FCC interventionist regulation like net neutrality, special access etc.

I.   The Relevant Facts:

WSJ Confirms FTC-Google Privacy Settlement Flaw

The Wall Street Journal essentially confirmed the huge flaw in the FTC-Google privacy settlement that I recently spotlighted; see Julia Angwin's excellent privacy article: "Apple, Google Collect User Data."

The WSJ investigation confirmed the fact that Google (and Apple too) are tracking their mobile device users' movements and locations based on "unique device identifiers" without users' knowledge or authorization.

The confirmation of this fact, confirms my point that the FTC-Google privacy settlement has a huge loophole in that it does not include "unique device identifiers" to be private information, a ridiculous distinction because a "unique device identifier" is obviously as private as a name or IP address, which the FTC already considers "covered information." FYI: the proposed bipartisan Kerry-McCain privacy legislation considers "unique device identifiers" to be private information.

If the FTC is truly serious about enforcing its fair representation laws and sanctioning deceptive and unfair privacy practices when they find them, it should modify its draft privacy settlement with Google to include "unique device identifiers," as covered private information, in the final settlement with Google that soon will be codified by the court.

Google Locks-in its One Click Away Defense -- Google's Pinocchio Defense: Part IX

In responding to the growing uproar of hypocrisy over comments made during Google's investor call by Google's CFO that "...everybody that uses Chrome gives us a guaranteed locked-in user" for Google," Brandi Sparkles, Google's renowned crisis PR expert, held a press conference today for just Google-friendly media.

 

  • Brandi Sparkles was joined on the Mountain View dais by Google's Official Keeper of the Google Narrative, Mr. Stori Spinner, and Director of Google's "That Was Not Us" Office, Ms. Anne Teetrust-Violet.

 

Brandi Sparkles read the following statement to friendly reporters and did not take any questions, in keeping with Google CEO Larry Page's new approach to the media.

"All discussion of Chrome and how it gives Google a "locked-in user," and that "the lifetime value of a Chrome user is phenomenal," that some claim occurred on last week's Google earnings call, was not authorized by me, so it simply did not happen.

We are in the process of innovatively "tweaking" our search algorithm so you will not find any evidence to the contrary. Only the extensive remarks by new CEO Larry Page on the call should be considered official, and his comments should be more than enough information and transparency to put this issue permanently to rest.

FreePress Continues to Divide Not Unite

FreePress' campaign director, Tim Karr, continues to overuse its main political tactic of demonizing anyone that disagrees with FreePress' goal of ridding the world of free market capitalism and property ownership.

FreePress' play book is all about the politicization of issues -- dividing people, not uniting them.

Read Randy May's Great NRO Piece "Rolling Back Regulation at the FCC"

Kudos to Randy May of the Free State Foundation for his outstanding must-read piece in the National Review Online: "Rolling Back Regulation at the FCC --How Congress Can Help Competition Flourish."

It is a very important reminder that Congress nearly unanimously set U.S. communications policy in 1996 "to promote competition and reduce regulation," in stark contrast to the FCC's Open Internet de-competition policy.

  • Randy is also spot on in encouraging Congress to re-fortify its extremely successful 1996 pro-competition policy by changing the burden-of-proof to assuming competition is superior to regulation, in order to counter the FCC's deep-seated bureaucratic instinct to regulate in order to perpetuate itself.

Randy is also dead right that the FCC looks backward to preserve its regulatory raison d'etre, rather than looking forward, obeying the law and trusting competition to drive consumer benefits.

We so need an FCC that genuinely encourages competition and lets consumers and the market choose market winners and losers, not the FCC.

 

 

 

 

 

Expect Google's Privacy Problems to Threaten Bubble 2.0

Expect Google's bull-in-a-china-shop entry into social, to try and neutralize FaceBook, to bring lots more major unwanted privacy attention to the privacy-challenged social media business model, and to contribute to the eventual bursting of the Internet investment Bubble 2.0.

 

  • The hot air that is inflating the social media Bubble 2.0 is that people somehow want to forfeit their privacy to socialize more efficiently, and that social media business models can indefinitely monetize privacy arbitrage against users' interests without consequence.
    • (See Part I of this series here.)
  • Ironically, the investment fate of social media, and Bubble 2.0, will depend less on what social media companies do, and more of what the leviathan Google does in social media.
    • The venture capital community has long been painfully aware of the Google-leviathan's  outsized effect on every other VC investment, because they always ask start-ups "What if Google Does It?"

 

I.   Privacy Baseline is on the Move: Bipartisan Interest in Privacy Protection Strengthening

Anyone following social media or Google would be remiss to not notice the flurry of recent bipartisan, bicameral, and bi-branch interest in increasing privacy protection of online users in just the last few weeks.