Blog - Page 57

Mike Darda asks a very good question of those who complain of Chinese currency “manipulation”: It is telling that the anti-China crowd in Congress has not taken aim at other dollar-linked or dollarized countries with destructive tariff proposals or charges of currency manipulation. Where are the tariff threats or cries of currency manipulation against Ecuador, El Salvador, East Timor, Panama, Lebanon, Hong Kong, Saudi Arabia, Kuwait, or Malaysia, all of which either use the dollar as legal tender, fix their currencies to it, or manage them in a tight band against it? -Bret Swanson

What’s going on? Last week the U.S. Trade Representative Rob Portman unveiled a comprehensive review of U.S.-China trade relations and our policy toward the Middle Kingdom. The report acknowledges the many benefits that flow from trade with China. It also announces new steps to strengthen our ability to monitor and affect China’s compliance with intellectual property laws and WTO rules. So far, so good. The report even stays away from the contentious issue of the supposedly undervalued Chinese currency, the yuan. The word “yuan” is not even mentioned in the long report. I thought this was a real breakthrough in U.S. policy toward China, showing a more nuanced and sophisticated view of the relationship, one that might actually get results Read More ›

Rich Karlgaard at his great Digital Rules blog refers to Robert Cringely’s new column. How can an article make so much and so little sense at the same time? Cringely correctly identifies big bandwidth as a replacement for Quality of Service (QoS). Big bandwidth will indeed render moot most of the “blocking” and “degradation” fears of the content companies. Congress, furthermore, should refrain from imposing new rules in a dynamic realm it knows little about. Yes, yes, yes. He must be lurking here at disco-tech. But then Cringely gets mixed up and implies the bandwidth providers (cablecos and telcos) are the ones asking for special new rules. Exactly wrong. It’s the content companies asking Congress to impose a massive new Read More ›

This week’s hearing on local franchising in the Senate Commerce Committee was breathtaking. Senator after senator expressed doubts about the wisdom of subjecting new entrants to the cable franchise process. Consumer advocates generally supported the phone companies. The same day, a group of 6 Republicans and Democrats on the committee signed a letter stating that Congress should reform the franchise process. “I think the stars are aligned,” noted Senator Jay Rockefeller (D-WV). One gets the impression that the cable industry hasn’t been paying attention for the past 25 years, as they take positions and employ arguments that monopolists have used in the past with little-to-no success (see, e.g., Deal of the Century: The Breakup of AT&T [1987], by Steve Coll). Read More ›

On deregulation: “It is ironic that cellphone service is widely available at low cost [in India] because it was regarded as a luxury and therefore left to the market, while electricity is hard to obtain because it has been regarded as a necessity and therefore managed by the government.” –Former Council of Economic Advisors Chairman Martin Feldstein, writing in the Wall Street Journal, Feb. 16, 2006. * * * On net neutrality: “with or without a new law, the FCC will affect the future in a major way by its approach to the question of broadband’s openness. Sometimes called net neutrality, the question of openness is multidimensional. It is hard to define and harder to answer. Chairman Martin and his Read More ›

Nobel prize winner and China expert Robert Mundell continues to be optimistic about the Chinese economy but now also believes the U.S. has stepped down its intense pressure to appreciate the Chinese yuan. Good news all around. -Bret Swanson

Maybe Google should look to old-economy providers of rich content to find actual examples of content degradation. It seems Netflix, the popular postal purveyor of DVDs, has been using “fairness algorithms” to slow the mailing of DVDs to its most voracious customers. High volume customers impose higher postal costs on Netflix, which charges a flat fee for all users. Low volume customers are more profitable. Netflix now spells out this policy in its service agreement so customers know what they’re getting. Seems reasonable enough. Google and other online content companies have been fretting over the figment of online service blockages and degradation, though no one can seem to find any actual examples. Here’s an example of a content company degrading Read More ›

Yesterday the head of the trade association representing most of the nation’s telephone companies testified that telephone companies will not block, impair or degrade what consumers and vendors can do on the Internet. “Today, I make the same commitment to you that our member companies make to their Internet customers: We will not block, impair, or degrade content, applications, or services. That is the plainest and most direct way I know to address concerns that have been raised about net neutrality.” –Walter B. McCormick, Jr. President and Chief Executive Officer United States Telecom Association February 7, 2006 As a practical matter, a voluntary commitment is significant because it is a de facto standard by which the actions of individual companies Read More ›

Sebastian Mallaby’s argument today that we face a “Fake China Threat” contains a number of true and important observations but in its overall effect is, I think, wrong. Mallaby correctly observes: – The rise of Chinese science is positive-sum. – Science tends to spread across the world, yielding new innovations and economic growth wherever the science is embraced and allowed to transform into commercial success. – The U.S. has the world’s best universities and has a big lead. But Mallaby complacently writes that “the world’s top researchers flock here; provided enough visas are available, it’s hard to see why this would change.” First of all, it’s not automatic that we will indeed execute a sane visa policy. Second, with universities Read More ›

The U.S. Conference of Mayors have written a letter to the chairman and ranking member of the House and Senate commerce committees opposing franchise reform. One sentence (“Congress may ensure our citizens and businesses benefit from the rewrite of the Communications Act through preserving local franchising authority”) may have been unintended or may reveal profound ignorance and profound arrogance. Many local officials see the primary value of the franchise process as an opportunity to extract noncash concessions from new entrants. That’s understandable. Although local revenues are increasing, Medicaid and education continue to devour city budgets. What are local politicians to do? In the late 1990s, local officials and their consultants at Miller & Van Eaton took broadband deployment for granted Read More ›