A letter to the editor - The Capitol Times (WI) July 28, 2007

Dear Editor: John Nichols in his July 19 column connects the Net neutrality debate to the openness of the Web when it is really about the openness of wallets. Or, more accurately, whose wallets will be forced open to pay for tomorrow’s advanced networks.

In his call for Net neutrality, Nichols ignores the crucial issue of how Net neutrality changes how to pay the huge expense of building the next generation of the Internet. No surprise since this is the reason so many oppose Net neutrality — because it shifts what should be the business costs of giant companies like Google, Amazon and eBay to Net users.

The current system of funding tomorrow’s Internet is making broadband prices more affordable. This drop in price is also helping close the digital divide — “bringing more and more communities and ideas online.”

Given that laws already guarantee access to information — another point Nichols neglects — why would we change things just to make the Net a little cheaper for companies and more expensive for America’s consumers?

Mike McCurry and Christopher Wolf Washington, D.C.

http://www.madison.com/tct/opinion/letters/203240

“This [60-day] deadline is appropriate in light of the Commission’s failure, after eight years, to develop lawful unbundling rules, and its apparent unwillingness to adhere to prior judicial rulings.” – Final sentence in the U.S. Court of Appeals for the District of Columbia’s 2004 opinion overturning FCC rules on telephone competition

The DC Court of Appeals’ verbal guillotine on federal efforts to create “wholesale” vs. “retail” phone service competition should be a timely reminder to anyone entranced by Google’s siren song urging same kind of federal rules for wireless broadband.

Like a bad Hollywood sequel, Google seems hellbent on pushing Congress and the FCC into making the same mistakes that delayed investment and caused thousands of lost jobs in the phone industry over the past decade.

Let’s go back to those thrilling days of yesteryear: Entire forests were sacrificed to produce the paper necessary for all the NPRMs, court and regulatory filings, amicus briefs, FCC orders, lawsuits, stays, more FCC orders, more lawsuits, and more stays – all in an eight-year adventure in the pointlessness of federally managed “retail” competition. As Adam Thierer at PFF notes, the three FCC attempts at creating regulated wholesale vs. retail “competition” alone totaled 1,575 pages and included 6,770 footnotes. Incidentally, let’s remember that in 2004, the ink was barely dry on a 576-page FCC “competition” plan – its third try! – when the DC Appeals Court struck it down.

As usual, Holman Jenkins has pegged this issue perfectly, though candidly we’re not sure if he’s trying to invoke an image from the old “Kung Fu” TV series or from the climax of “Return of the Jedi”. One thing is certain: With our economy dependent on broadband investment, Google’s plan for new wireless regulation is a loser for everyone except, not surprisingly, Google.

Que viva Roberto de Posada y la Coalicion Latina!

Writing about net neutrality in today’s New York Sun, Don Roberto, president of the non-profit Latino Counsel, explains:

“Today, only 29% of Latino adults subscribe to broadband at home, compared to 43% of white America. That statistical difference represents thousands of potential Hispanic leaders and entrepreneurs that are being left behind when it comes to acquiring the online skills necessary to succeed in tomorrow’s world.”

As for net neutrality, Don Roberto is clear:

“An open Internet is good and we should oppose any effort by broadband providers to balkanize it. But the necessities of competition have proven the best antidote for bad behavior by broadband companies, and the net neutrality campaign may be a case where the cure is far worse than the poison.”

His oped makes a key point about net neutrality and the Digital Divide: By shifting deployment costs onto consumers, Net neutrality hits hardest at the most price-sensitive consumers. They include the millions of Hispanic Americans in underserved communities – a point that LULAC also made to Congress prior to last June’s stinging floor defeat for net neutrality.

Indeed, proponents of net neutrality don’t argue the central point about price hikes hitting the poor and underserved the worst. Instead, they try to dress up their argument for net neutrality with rhetoric about unspecified doom for everyone sometime in the future.

It’s a reach. Or as the old Spanish proverb puts it, “Aunque la mona se vista de seda, mona se queda.”

When it comes to high tech and telecom, Wall Street Journal columnist Holman Jenkins has a pretty good track record. He correctly predicted that AOL’s narrowband online success would crumble once broadband went mass market. As far back as 2000, he saw the financially self-defeating nature of trying to regulate broadband access, noting “Dumb pipe equals poor shareholders.”

Now, in an oped titled “Sort of Evil,” he puts wireless regulation in his sights and, as usual, his aim is on par with Bruce Willis’ in any of the “DieHard” movies. Here’s a sample:

• “Google and allied special interests… want cellular operators to package and sell access to their networks the way landline broadband operators do….
• “Why bother — except to tilt the playing field at a crucial moment in wireless’s development to please one very deep-pocketed company?
• “Google wants the business models of wireless and wired broadband suppliers adjusted to serve Google’s interests now, because — well, because, there’s a regulatory club lying at hand. The money Google spends on lobbying, after all, is pennies to the billions it invests in server farms and software. Yet the payoff is potentially sizeable. Google’s aim is nothing less than making sure its dominance in the wired world is carried over into the emerging wireless marketplace.”

As Officer John McClane might put it, “Yippie-Kay-Yea, Google.”

Robert Crandall and Hal Singer just published this good Wall Street Journal oped on wireless and Net neutrality. It’s great on the economics and historical perspective but misses a key technology issue.

Unlike DSL and fiber optics, wireless is a shared platform. On a mass market scale, its top speed now is around 1.5 MB per second depending on the technology. So if you assume that video streaming traffic needs 100-500 KB per second for adequate quality, it quickly becomes pretty obvious that regulating wireless neutrality among multiple applications (not just video but music sharing, VOIP, peer-to-peer and others) would choke the system.

The result would be slower data speeds and reduced QoS guarantees for everyone.

In fairness, many sharp analysts – Hance Haney at Discovery comes to mind – have argued that this is a long-term non-issue since market innovation will increase wireless transport capacity. Fair enough and worthy of a good debate. But short-term, this issue can’t be regulated away.

This talk about the federal government mandating wireless neutrality reminds us of Will Rodgers’ famous advice to Woodrow Wilson about solving the German U-Boat problem. “Just bring the oceans to a boil,” he said, “I’ll leave the details to the technicians.”

Washington, DC, July 16, 2007 — Hands Off The Internet, the nationwide coalition supporting growth of the Internet for the benefit of consumers, today made a filing with the FCC showing how proponents of so-called Net Neutrality regulation – including especially Internet giant Google — have failed to provide any concrete reasons why such regulation is needed. The filing came in response to FCC filings by Google and others in the late Spring in which they called for formal regulation of the Internet by the FCC.

The Hands Off submission – which you can read here (pdf) - explains that, despite the overheated claims by Google that new regulations are needed, there is no current or likely market condition that they can point to justifying new regulations by the Commission. Specifically, as Hands Off points out, Google and its allies cannot show any content discrimination or service degradation to warrant intervention by the government. The filing also highlights how regulation of the sort sought by Google has the potential to thwart Internet growth and make consumer access unfairly expensive.

Hands Off co-chairs Mike McCurry and Christopher Wolf, a partner at the law firm of Proskauer Rose LLP (author of the FCC filings for the coalition), called the pro-net neutrality demands “all style and no substance”.

In the opening summary of the FCC submission, Hands Off explains that:

[i]n contrast to the reasoned submissions of those against net neutrality regulation, proponents of net neutrality regulation have failed to identify a single consumer harm the Commission needs to address through the adoption of a new regulatory regime. Instead, these proponents rely, as they have now for several years, on conjecture, speculation and hypocritical assertions to suggest that the marketplace, notwithstanding the extraordinary success and continued growth of the Internet, must now be regulated in order to ensure consumers will be protected from non-existent harms.

The Hands Off filing also cites extensively to a Federal Trade Commission staff report issued after the initial filings at the FCC by Google and others, in which the FTC finds net neutrality to be a “non-issue” given that competition in the broadband market is increasing, and that the hypothetical concerns raised by neutrality supporters can be addressed by existing laws.

Hands Off has emphasized the importance of providing consumers, at a reasonable cost, with robust networks that can handle the massive increase in data traffic that has occurred due in large part to video applications. The coalition’s FCC filings show how net neutrality will get in the way of the next generation Internet, and will shift the cost burden unfairly to consumers. “Google’s call for federal regulation of the Internet with no facts to back up its demand, seems designed only to benefit Google and not consumers”, said Hands Off co-chairs McCurry and Wolf.

The Hands Off the Internet coalition is a Washington, DC-based coalition of companies and nonprofit organizations that believes the Internet has flourished because government has not tried to regulate it. Members include Alcatel-Lucent, AT&T, 3M, the National Association of Manufacturers, FiberControl, and Cinergy Communications. Nonprofit members include Citizens Against Government Waste, the American Conservative Union and the National Black Chamber of Commerce.

This just in from Dr. Art Thomas at the National Association for Equal Opportunity in Higher Education which champions America’s historically and predominantly black colleges and universities:

“But well-meaning activists are now pushing for regulations on the Internet that would actually raise the price of broadband access, effectively pulling the high-speed plug on minority and low-income youth. They are pushing for ‘net neutrality’ legislation, which would block broadband service providers from charging large Internet companies like Google for carrying things like high-quality video into users’ homes.

The activists believe these laws will protect freedom of speech on the Web. But freedom of speech is not what’s at stake. This is about money. If they win, the losers will be minority and low-income youth.”

The good news is that the Digital Divide is finally closing. On July 6, The Chicago Tribune focused on this development, quoting a study from Pew Research that calls the recent uptake in African-American broadband use “phenomenal.”

How can any progressive in good conscience support a policy that jeopardizes this progress?