posts for the 'Wired' Category

Heterogeneity Wins

September 12, 2007

The last time this blog checked in with Wired’s Chris Anderson was almost a year ago when he appeared in New York to discuss Internet policies with Larry Lessig. During that discussion, Anderson criticized net neutrality, noting:

“I think that [the Internet] is a very robust network. I think that heterogeneity wins. And I think we should wait for markets to fail before we create legislation that could create a much worse problem by mistake.”

He’s right, of course, and thanks to the current Newsweek, it’s easy to see another of Anderson’s predictions come true. Titled “Beethoven Goes Digital,” this article by Alexandra Seno describes how the Net has revived the commercial success of classical music. Last year, classical music sales rose 22 percent even as total music sales fell 5 percent – as Newsweek calls it, “ a great example of how the ‘long tail’ theory is changing an industry.”

This is exactly the trend Anderson predicted in his 2006 book on cyber-commerce “The Long Tail: Why the Future of Business is Selling Less of More.” Anderson’s “long tail” theory is that as home broadband use becomes more affordable, businesses will thrive by selling small amounts of an increasing number of items. He notes:

“This shattering of the mainstream into a zillion different cultural shards is something that upsets traditional media and entertainment to no end. After decades of executives refining their skill in creating, picking, and promoting hits, those hits are suddenly not enough.

“That mass of niches has always existed, but as the cost of reaching it falls—consumers finding niche products, and niche products finding consumers—it’s suddenly becoming a cultural and economic force to be reckoned with.

“For a century we have winnowed out all but the best-sellers to make the most efficient use of costly shelf space, screens, channels, and attention. Now, in a new era of networked consumers and digital everything, the economics of such distribution are changing radically as the Internet absorbs each industry it touches, becoming store, theater, and broadcaster at a fraction of the traditional cost.”

If you want to find out more about the “long tail,” we’re happy to post this link as a charitable service to our readers and not because we’re shamelessly hoping to be invited to watch Anderson test his latest UAVs.

Last year Wired published a must-read article that made the important but inconvenient (for “net neutrality” advocates) point that the supposed neutrality of the Internet is a myth, no more real than the tall tales found at Snopes.com.

Now Forbes has a column from Nick Shulz (among others on the subject) that translates an AEI study about the Internet’s longstanding non-neutrality for non-academics:

Robert Hahn and Robert Litan of the AEI-Brookings Joint Center for Regulatory Studies argue that, contrary to the claims of regulated neutrality proponents, “all bits of information are not treated equally from an economic standpoint.” They argue that “the Internet is not end-to-end now and was never designed to be strictly neutral.”

How can this be? The engineering architects of the Internet drafted the technical rules in informal papers called Requests for Comment.
The early drafters of the Net’s architecture, according to Hahn and Litan, “recognized the need to offer priority to some packets over others.” …

If strict net neutrality is not, in fact, essential to the architecture of the Internet, it undermines the arguments in favor of federal or state net neutrality mandates and suggests the market will do a better job of sorting out the Internet’s future evolution.

Bingo. The abstract of that report, “The Myth of Network Neutrality and What We Should Do About It,” can be found here. Click through to find the whole thing. Even if you’re not a techie or an academic, it isn’t too hard to follow. We just wish the would-be net regulators would give it some thought themselves.

Larry Lessig is one of the academics most closely associated with the development of the “net neutrality” concept. Its adherents like to pretend it’s a long-standing principle, but in fact Lessig and fellow professor and web writer Tim Wu came up with the term in just the last few years.

Before that, Lessig was a prominent supporter of the last big mistaken governmental intrusion into the high-tech marketplace: the poorly thought out attempt to break up Microsoft in the late 1990s. Lessig has since recanted his support for a breakup, and in the latest Wired, this has him rethinking his convictions on “net neutrality” too:

I think about this mistake whenever I think about the current Microsoft-like network-neutrality debate – whether network owners can pick the stuff that flows across “their” network. In this debate, too, I am a reluctant regulator. And again, I don’t see how it’s possible to steer broadband providers away from a business model that – like Microsoft’s – may benefit them but could stifle innovation. Every dominant commercial competitor has the same incentive: to build a business that extracts all potential value from the pipes that company owns.

But life is all about repeating the same mistakes in many different contexts. So, are we reluctant regulators wrong again? Is there something we think is impossible today that will be obvious tomorrow? Can last-mile broadband be developed in a way that doesn’t rely on the incentives that drive current providers toward innovation-stifling business models?

Lessig looks to the Linux model for an archetype for what could happen in computer networks. There may be something to that, although Linux has a tiny market share concentrated among technology elites (especially people who know what a “compiler” is).

But most people don’t need Linux. For most, Windows (or Macintosh) is all they’ll ever need, and the breakup attempt had no positive effect for the consumer.

Likewise, “net neutrality” regulations make no sense when antitrust law already covers this space and new pipes are coming online around the country. And the last thing the telecommunications industry needs is the destructive, distracting equivalent of the Microsoft trial.



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