In case you missed it, The Wall Street Journal just weighed in on the Comcast-BitTorrent resolution. You can read the whole thing here but this line is the clincher:
Government’s role here, properly understood, is not to tell Comcast how to manage its network. Rather, it is to make sure consumers have alternatives to Comcast if they are unhappy with their Internet service.
It’s been widely reported that Chairman Edward Markey and Rep. Charles “Chip” Pickering have introduced a bill which includes a requirement that the Federal Communications Commission study how broadband providers are coping with the exploding growth of data sent over their networks. The FCC would also have to hold eight conferences to assess broadband service competition.
We have a great respect for Chairman Markey and we’re certainly pleased that today’s bill doesn’t try to revive what Congress decisively rejected two years ago — government Internet regulation. Regarding the study specifically, there’s no question that a reasoned examination of the facts will demonstrate the folly of net neutrality. The Federal Trade Commission (FTC) and the Federal Communications Commission (FCC) recently examined the issues that the Markey bill proposes be studied. Neither study found evidence of any problem warranting regulation. Both agencies have also clearly affirmed their ability to monitor and deal with any problems that may arise.
On its face we agree with the concept; Hands Off the Internet has always supported efforts to gather public opinion. However, we are concerned that an effort to seek public input is intended to be a stalking horse for federal Internet regulation. The continued push by special interests to regulate Internet neutrality undercuts the best hope Net users have for faster, more affordable broadband. Network innovation and deployment free from federal regulation are the keys to meet consumers’ rapidly growing bandwidth demands. More importantly efforts behind Net Neutrality regulations will create uncertainty for investors and internet service providers that must build the infrastructure to meet consumer demands.
Consumers cannot afford the cost or delays created by Net Neutrality; now is the time to clear the way for investment and innovation. Vigorous competition, not net neutrality bills and arbitrary decisions by lawyers and bureaucrats, is the best way to guarantee that open, affordable Internet.
BusinessWeek highlights the latest Andrew Odlyzko paper (PDF) on Net Neutrality, which makes a pretty odd argument…
The general conclusion is that some form of government intervention, to set the rules, is inevitable. (And at some point it may be welcomed by the players, just as government intervention was welcomed in the end by the railroads.)
Well, yes, government intervention was welcomed in the end by the railroads. That’s because, as Timothy B. Lee pointed out in the New York Times, whatever the good intentions of those who sought to regulate the market, the result was, as a Ralph Nader group described it, “primarily a forum at which transportation interests divide up the national transportation market.” Lee explained further at Ars Technica…
The railroads were the high-tech industry of their day, and there was a lot of concern in the 1870s and 1880s that the railroads had become too monopolistic. Congress responded by creating the Interstate Commerce Commission in 1887, giving it the power to regulate the railroads. … [Yet] the story of the ICC does not have a happy ending. After President Grover Cleveland appointed Thomas M. Cooley, a railroad ally, as its first chairman, the Commission quickly fell under the control of the railroads, gradually transforming the American transportation industry into a cartel. By 1935, when it was given oversight of the trucking industry, the commission was restricting competition and enabling price increases throughout virtually the entire surface transportation industry.
Indeed, more than 100 years later, taxpayers are still subsidizing railroads. You might begin to imagine now why the regulation was “welcomed in the end by the railroads.” If you’re still having trouble, close your eyes and count to $2,000,000,000. That’s how much taxpayer money Amtrak now receives every year. Out of your pocket.
Andrew Odlyzko is right that government intervention was eventually welcomed by the railroads. However, we don’t think “the players will like it because they can create a cartel like the railroad industry did” is a very compelling argument for net neutrality. It’s certainly not an argument we expect consumers and taxpayers to find persuasive.
The Internet marches on.
This week, Akamai announced a new IP acceleration service to optimize applications not accessed via a web browser. (Think Oracle.) The service works at the TCP/IP level using an end-to-end system involving Akamai routers installed outside a customer’s firewall. Granted, this is probably more important to enterprise users than ordinary net users, but as with most Internet developments, what starts as a business benefit quickly spreads once the technology becomes more affordable.
Proving that good things come in pairs, just prior to Akamai’s announcement, Level 3 announced that it was lowering prices for content delivery to approximately the market price for high-speed IP transport. That price drop all but eliminated Level 3’s premium for caching and downloading online content. The company also reaffirmed that a new streaming service will be ready by mid-November to compete against Akamai.
Three comments:
First, these announcements are timely reminders that that networks already have QoS standards that ease congestion and improve users’ experience. That may shock the sensibilities of the “all data is equal” crowd but the proof is in the results.
Second, prices are dropping and competing services are emerging – with government regulators are nowhere to be seen.
Third, given the spiraling complexity in the Net’s technology, we wonder if net neutrality partisans can still keep a straight face when they call federal oversight “a tailored, minimally-intrusive net neutrality requirement.”
If there’s one area of common ground in net neutrality, it’s the need for broadband deployment.
The logic (or what passes for it) of net neutrality rests on consumers’ supposed lack of broadband choices. But like the blind squirrel that occasionally finds an acorn, this has an element of truth: Yes, consumers do need better broadband choices. We’ve said it repeatedly. So have unions, independent experts and corporations on both sides of the debate.
That’s why this article in the current Economist ought to be required reading for state and federal lawmakers. The article describes a remarkably successful Kentucky partnership to promote broadband deployment and usage:
“According to Brian Mefford, president of ConnectKentucky, a public-private partnership, a few years ago the state had among the lowest rates of broadband availability in the country. Internet service providers could not be sure that there were enough [interested users] in the Kentucky countryside to justify new investment….
“But by the end of this year, Mr Mefford boasts, 98% of residents will have access to inexpensive broadband services. This is primarily because of ConnectKentucky’s effort to map broadband demand in communities that didn’t have access, he says, which indicated that enough people in Kentucky farm country would sign up if providers entered the market. At the same time, the organisation also talked up high-speed internet services to skeptical residents…. Once isolated Kentuckians can now consult with doctors in faraway cities or telecommute.”
The key to Kentucky’s success is clear: a joint effort to promote broadband demand and new investment. Equally clear is how this approach conflicts with Net neutrality, which emphasizes regulation of existing technologies.
But the results speak for themselves and ought to be embraced by all concerned with improving U.S. broadband services.
OK, anyone want to join hands and sing Kumbaya?
“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.
Last week the U.S. Federal Trade Commission (FTC) issued a report (pdf) urging caution on the issue of net neutrality and asserting what we here at the Hands Off blog have been saying all along: net neutrality is a non-issue, competition in the broadband market is increasing, and the completely hypothetical concerns raised by neutrality supporters could be more than adequately addressed by existing laws.
On the prospect of net neutrality legislation, FTC Chairwoman Deborah Majoras noted in her statement that without evidence of “market failure or demonstrated consumer harm, policy makers should be particularly hesitant to enact new regulation in this area.” We don’t think we could have said it any better ourselves.
