FTC

A core purpose of NetCompetition.org is to promote a debate of Net neutrality regulation on the merits. SaveTheInternet.com had a recent blog post "Painting over broadband failures with pretty pictures" that prompted me to comment on their blog -- which I have included below:

"If SaveTheInternet followers are truly "open" to diverse points of view that may be different from theirs, I recommend that you consider the mounting evidence that the US is in fact not falling behind but is actually a unique success in promoting facilities-based broadband competition in the world. Please see this link for the four best alternative views on this question:
http://www.precursorblog.com/node/451 .

Given the ongoing reporting of claims by net neutrality proponents that US broadband deployment is falling behind our international competitors (like the USA Today article in this link suggests), it is helpful to pull together some of the best analyses I have seen that debunk these claims by the OECD/CWA.  

For those who care to more substantively review the facts, evidence and merits of this very important public policy question, I highly recommend reading the following four sources linked in this blog, which all effectively and differently debunk the claim the US is falling behind on broadband:

I strongly recommend the FTC staff report on "Broadband Connectivity Competition Policy" to anyone wanting an objective, well-reasoned, fair, and comprehensive review of the facts and evidence of the net neutrality regulation debate.

I believe the most important sentence in the whole 170 page staff report, which covered an enormous and comprehensive public record on the subject, was on page 11 and again on page 160:

•  "To date we are unaware of any siginificant market failure or demonstrated consumer harm from conduct by broadband providers." [Bold emphasis added]
• I believe that's the best bottomline summary conclusion of the report.

The FTC report can be further well summarized by the following four sentences found on pages 10, 11, 155 and 11 respectively:

• "We recommend policymakers proceed with caution in evaluating proposals to enact regulations in the area of broadband Internet access."
• "Policymakers also should carefully consider the potentially adverse and unintended effects of regulation in the area of broadband Internet accesss before enacting any such regulation."
• "Over time, competition produces the best results for consumers, providing them the lowest prices, the highest quality products and services, and the most choice."
• "The FTC will continue to devote substantial resources to maintaining competition and protecting consumers in the area of broadband Internet access, using a variety of tools."

In closing, I was very impressed with the FTC staff's knowledge, sophistication, and fair representation of both sides' views.

Net neutrality proponents continue to fabricate problems to manipulate public policy to promote government intervention and regulation over free markets.

• They fabricated a non-existent problem that broadband companies wanted to block, degrade and impair users access to the content of their choice.
• Totally bogus. They have produced no evidence to back up their fabricated problem.
• They are up to their old tricks again, trying to fabricate a problem that the US is falling behind on broadband. See Steve Levy's "hook-line-and-sinker" take on US broadband standing in the world in Newsweek.
• This is a fabricated bogus "problem" as well.
• They only cite a biased OECD study that claims the US is 24th in the OECD, but don't mention any of the many counter-arguments why that "study" is way off the mark.
• FCC Commissioner McDowell recently did a great job discrediting the very flawed methodology that the OECD used.  
• The OECD report is a classic example of "How to lie with statistics."
• There is also never a mention by net neutrality proponents of the competing broadband ranking study by The Economist's Intelligence Unit which ranks the US #2 in Internet/broadband in the world.

Fortunately net neutrality proponents have failed miserably in their efforts to date. 

Google's naiveté and cluelessness on antitrust matters continues to amaze me. While Google has ramped up its Washington lobbying presence a ton of late, it is amusing that the company-at-large still does not have a lick of political savvy or common sense.

It is almost as if Google operates having an out-of-body experience, where their leaders think they can float sanctimoniously above the playing field and see everything perfectly, but no one can see them or what they are doing.

What do I mean? Let me put Google's antitrust and political behavior into context.

• Google is ferociously going after Microsoft on antitrust matters. After they recently won a huge concession from Microsoft to make Google's desktop search work better and faster -- a concession not required by the DOJ-supervised committee that oversees Microsoft's competitive behavior -- Google is now asking for Microsoft's antitrust decree not to expire.
• This is classic, hardball, take-no-prisoners behavior that sometimes yields short-term results, but always invites long-term disaster.
• In effect, Google is taunting the antitrust-caged Microsoft tiger, imagining that they are untouchable, invincible and legally superior.

It is amazing to me that Google appears to be unaware and clueless that they have voluntarily walked into their own “antitrust cage" of the FTC review process for approving two of their deals, DoubleClick and FeedBurner.

Reuters reports that ebay will "resume Web advertising on a limited basis with Google..." 

• After witholding its advertising affections from Google for 10 long days, it appears that Google was sufficiently contrite and apologetic to eBay for its bad manners in competing with eBay by hosting a party for its competing online payment product, Checkout, in the same city as eBay's big confab that highlights it dominant online payment service, PayPal.

There are a few important points to be made about Internet "competition" here.

• First, there is little competition in the online auction listings. According to Jupiter Research, eBay has 95% of the online auction market, hence my "webopoly" moniker" for eBay.
• Second, eBay likes to tie its leading online payment service, PayPal to its online auction listings webopoly, because it does not allow its users to use Google's Checkout service.
• Interesting actual behavior for a company that fears potential broadband access problems via no net neutrality. 
• Third, there are some serious competitive conflicts of interest going on here between eBay and Google.
• The mature auction webopoly, EBay  apparently was successful in teaching aspiring search webopoly, Google, a thing or to about competition on the web.
• The message was "don't mess  with my webopoly, go dominate another corner of the Internet.
• Fourth, it appears Google got the message and realized it is in their profit maximizing interest to not fully compete with eBay, but focus its efforts on further dominating its access to content "corner" of the Internet by buying up DoubleClick and Feedburner.     

While I was very glad to hear that eBay continues to support extending the Internet Tax Moratorium, which expires in November, I found eBay's Brian Bieron's rationale for it very hypocritical given their stance on net neutrality.

National Journal's Tech Daily yesterday  reported that:

• eBay's "Bieron said he thinks the Internet has been working well and it would be a mistake to change any of the underpinnings to how it currently operates."

Hello eBay?

• If "the Internet has been working well" why propose to hyper-regulate it with new net neutrality legislation for the first time?
• If "it would be a mistake to change any of the underpinnings to how it currently operates", why don't you think new net neutrality regulation would not change the underpinnings of how the Internet operates -- from free market to government "managed competition"?
• I can anticipate your standard response, which is still bogus -- that the Internet has always been neutral and new legislation would just maintain the status quo.
• I wrote a one-pager that totally debunked this bogus claim your side continually makes.

Bottomline:  Net neutrality proponents cannot win on the merits and the facts of the issue, so they must systematically fabricate a problem, and misrepresent the context of the legislation as status quo.

Maine's Governor signed Maine's non-binding resolution on net neutrality today calling for a "study" of the issue due next year and also stated that net neutrality is a Federal issue, not a state issue, due to the interstate nature of the Internet.

Nevertheless, I am sure the net neutrality movement will try and make a proverbial silk purse out of this sow's ear.

If they continue spinning the media like they have this past couple of weeks, they will continue to badly misrepresent what Maine actually did.

• Misrepresentation and bogus claims is the standard MO of the net neutrality movement.
• They manufactured an issue in net neutrality, basically by fabricating a problem that does not exist, and then hammering bogus allegations.
• Like "chicken little" they scream that the Internet is in grave danger and will fall out of the sky, but they can provide no evidence of a real problem. And the sky clearly has not fallen.
• When confronted with this evidence, they trump up another bogus claim, saying that if they were not making it an issue there would be a net neutrality problem.

Net neutrality is a bogus issue. I fully expect the net neutrality movement to make the bogus claim that they won in Maine when truth be told the Snowe-Dorgan-like bill they asked for went nowhere.

• Folks that will manufacture a bogus issue have no problem claiming a bogus victory.

I have been watching with some amusement all of the SaveTheInternet-launched blogilantes ranting about the prospect of Internet backbone networks like AT&T or others, becoming a filtering technology solution to Hollywood's problem of rampant content piracy on the Internet.

Why am I amused?

• Because net neutrality proponents are so predictably knee jerk in their reaction to anything that they see as a threat to their datatopian ideal of a net free of any broadband competition, differentiation or diversity of choice.
• Net neutrality proponents have such a bad case of "myneutralopia" that they can't see the proverbial forest for the trees.
• Over the last year, net neutrality proponents have had to make an increasing number of big concessions about what "bit discrimination" is acceptable in order to remain credible on Capitol Hill.
• They have had to concede and support network management "discrimination" of bits:
• To filter out viruses, filtering which is essential to protect the Internet and users from Net blackouts or shutdowns;
• To filter out illegal spam, so the Internet and email remains unclogged and useful; and
• To allow for law enforcement under CALEA, the ability to surveil criminal and terrorist activity on the Internet.
• If all that network managment "discrimination of bits" is OK,
• Then why isn't it OK for these same network managers to filter traffic for pirated content, i.e. trafficking in stolen goods?
• In other words, if it is OK to filter the Internet for the misdemeanors and felonies of spreading viruses and spam, and it is longstanding law for the Goverment to be able to surveil the Internet to detect criminal behavior, how is new network filtering for illegal pirated content any different or any less necessary?

Once again, the net neutrality crowd's kneejerk reaction is to side with lawbreakers rather than with every day citizens and users of the Internet who are all ultimately harmed by allowing Internet-enabled crimes to go undetected and unnpunished.

I was surprised in yesterday's news splashes on the potential swap of MySpace to Yahoo for roughly a quarter of Yahoo.

I am blogging on this because the news follow-up does not appear to have connected the dots about how bizarre this combination sounds economically and competitively.

While on the surface it seems logical because Yahoo was reportedly in talks to buy MySpace before NewsCorp did.

What makes this bizarre is what has transpired since.

• NewsCorp took the no revenue MySpace exploding growth audience and did a deal with Google which guaranteed MySpace a minimum of $900m in ad revenue over four years.