Net Neutrality

Net neutrality advocates argue that network providers have the ability and the incentive to block access by consumers to the web sites of their choice. At a Mar. 14th Senate Commerce Committee hearing featuring several high-placed Wall Street analysts, this question was addressed: SEN. STEVENS: Let me ask you about this net neutrality problem that two of you have mentioned substantially. Do you think a network operator could block access to a company like Google or Yahoo! and really get away with it? MR. SZYMCZAK (JPMorgan): I think that would be very difficult to sustain on an ongoing basis because if we think about it in a competitive nature, if the phone company were to block it, a lot of Read More ›

A group of Wall Street analysts provided key advice to the Senate Commerce Committee at a hearing Mar. 14th. The following excerpts are drawn from both oral and written testimony (emphasis added throughout). In a nutshell, the consensus is that the investment outlook for broadband is somewhere between uncertain and bleak. Net neutrality or a la carte regulatory mandates would make the outlook worse. “As media consumption over the Internet develops at a rapid pace, I believe that it is too early to introduce regulation on key issues such as a la carte packaging and pricing and on net neutrality as the market is still in its early stages. In fact, the broader media and communications sector is perhaps at Read More ›

Experience should not disqualify FCC nominees, but the agency should have a predictable recusal mechanism to ensure it is perceived as an impartial decisionmaker (and to ensure that federal service is not misconstrued as an opportunity to reward friends and supporters). It does not.

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As a congressman, Ron Wyden once said that competition is too important to be left to the marketplace. Today, Senator Wyden (D-OR) introduced a “net neutrality” bill (S. 2360) which he thinks is needed to prevent the construction of a “priority lane” on the Internet. National Journal’s Technology Daily ($), paraphrased Wyden saying that “it is perfectly acceptable for broadband providers to charge consumers more for faster speeds, but that it is not acceptable to charge businesses for faster Internet delivery.” That’s like saying businesses shouldn’t pay taxes. The Wyden proposal may be intended merely to ensure that the Internet will function like the telephone network, but in reality it is a radical proposal that would actually shift future costs Read More ›

House Energy & Commerce Chairman Joe Barton (R-TX), along with Reps. Chip Pickering (R-MS) and Fred Upton (R-MI) have an alternative plan in mind for cable franchise reform, according to this afternoon’s National Journal’s Technology Daily ($). Like the Dingell plan, the Republican vision includes a national franchise according to which new entrants would pay the customary 5% franchise fee to localities. But the Republican is superior in two critical respects: No build-out requirement. No requirement to negotiate with local franchise authorities as a pre-condition to obtain a national franchise. It may sound counterintuitive, but the absence of a build-out requirement is actually better for consumers because it reduces investment risk. Tens of billions of dollars are necessary to extend 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 ›

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 ›

I think its an open secret that Congress is highly unlikely to make significant progress toward comprehensive telecom reform in 2006. That’s probably a good thing. While many people, including many members of Congress, recognize that telecom law badly needs an update, there is an astounding lack of awareness that the basic problem is too much regulation. Most of the proposals so far would create more new regulation than they would eliminate. The supporters of net neutrality sense that a window of opportunity is closing, and they are trying to do something about it. Douglas Van Houweling, the CEO of Internet2, gave an interview to National Journal’s Technology Daily, (subscription required) in which he claimed: “If you have enough bandwidth Read More ›

Are Comcast and Verizon bent on slowing your Google and Yahoo! searches to a crawl? Each day, it seems, yet another pundit jumps into the “net neutrality” fray, and that is the impression they give readers. In last Sunday’s Washington Post, it was Christopher Stern failing to listen to the technology. Stern’s treatment was fairer than most but still drew a false caricature of the complex business and technical issues that have recently dominated the Internet and New Media debate. Stern asks: “Do you prefer to search for information online with Google or Yahoo? What about bargain shopping — do you go to Amazon or eBay? Many of us make these kinds of decisions several times a day, based on Read More ›