posts for the 'Newspaper' Category

Clueless in Seattle

September 20, 2007

If there’s an award for the dumbest historical reference of the week, it would surely go to The Seattle Times for its editorial in favor of net neutrality, “Free the Internet.” It begins:

Democracy is meaningless without structure. It requires support and infrastructure to become a word capable of giving entire nations voice and freedom.

The architects of America’s democracy knew this. The Founding Fathers made sure newspapers and magazines were widely distributed by allowing periodicals to utilize low postage rates.

Come again? Saying that the Founding Fathers encouraged newspapers by allowing them to “utilize” low postage rates is like saying that the USC Trojans are undefeated because the players are encouraged to wear cleats.

The obvious irony, no doubt lost on The Seattle Times editorial board, is that the Founding Fathers truly protected newspapers by prohibiting Congress from “abridging the freedom of speech, or of the press.” Yet The Times’ editorial is actually a cri de coeur for a law giving federal regulators and judges the ultimate say over today’s Internet.

The editorial gets even better: “Constructive regulation is needed to allow the Internet to grow and mature.” Really? For more than a decade, the Net has grown rather nicely without a lot of “constructive regulation” so it seems odd that the editorial doesn’t even offer a reason. Here’s a wild guess why: The deafening silence is The Seattle Times’ admission that there is not a single problem facing net users today that could be resolved with net neutrality.

Finally, the comment that “there is nothing stopping” a carrier from “degrading content from competitors” is an eye-roller given all the antitrust and other laws protecting Net users from online discrimination. For more on this, click here [PDF].

On one point, we do agree with The Seattle Times: The Net requires “support and infrastructure.” Our view is that this should be a shared responsibility involving individual and large corporate users. The Times would exempt the corporations through net neutrality and put the costs entirely on Net users.

That’s their right of course, but it seems an odd way to claim that you’re on the side of the little guy.

Lies, Damn Lies & Statistics

September 18, 2007

So how easy is it for someone with a political agenda to manufacture a crisis from normal economic trends? Judging by Monday’s Minneapolis Star-Tribune, the answer is: EXTREMELY.

An article entitled “A Net in Neutral” profiles the work of Andrew Odlyzko, net neutrality supporter and head of the University of Minnesota’s Digital Technology Center. Here’s Odlyzko’s basic claim: The Net isn’t growing as fast as it has been, the annual growth rate of Internet traffic has dropped to 50 percent and because of these trends, Congress should spur growth by passing net neutrality.

From a statistical perspective, this analysis wouldn’t stand up in a freshman year economics class. Look at the following hypothetical product growth and you’ll see why:

    Year       Product users    Growth Rate

    Year 1     10 million
    Year 2     15 million       50%
    Year 3     21 million       40%
    Year 4     27 million       28%

The fact is that MORE signed up in Year 3 than in Year 2 and that number stayed the same for Year 4. But if you look only at the growth rate, it (shock!) drops almost 50 percent from Year 2 to Year 4. Horrors!

This is what economists call the “Tyranny of the Small Base” and it’s an absurd way to base long-term usage projections.

It also shows why Mr. Odlyzko’s attempt to tie this to net neutrality is as weak as Paris Hilton’s DUI excuse. Of course the growth rate declines but the key measure – total amount of data being sent – continues to surge, which is the fact that’s driving the network’s expensive upgrades.

Two more points out of Econ 101 about new product adoption: First, it’s rarely lineal. Yes, you have surging growth initially but as the market gets increasingly saturated, like today’s broadband market, growth rates often come in spurts. Second, it’s doubtful that latecomers to the broadband web (in other words, the grandparents down the street) are going to use it as much as early adopters.

Finally, some of the other contentions in the article – we can’t tell whether they come from the reporter or Mr. Odlyzko – are especially ludicrous. For example, there’s this nugget:

“Traffic growth may be slowing for several reasons: The speed of computers isn’t increasing as fast as it once did….”

It’s unclear whether this is a reference to home PCs or servers, but in either case it’s an absurd rationale for changes in growth rates.

If this is the best that net neutrality proponents can muster to support net neutrality, they’re in worse shape than we thought. It also brings to mind the old saying, Give me the facts and I’ll see what I can do with them.



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