Net Neutrality

Hal Singer of Criterion Economics has a good article opposing Net Neutrality in the current Cato Institute journal Regulation: With the advent of streaming video and other bandwidth intensive applications, the demand for bandwidth is projected to overtake the existing supply quickly. Regulators and legislators should not interfere with a broadband service provider’s ability to manage this “coming exaflood” with intelligent networks. At best, the price of Internet service will skyrocket if broadband service providers can meet the coming traffic using only expanded infrastructure. At worst, the Internet experience for all users will deteriorate. Given the tremendous uncertainty over the future of the Internet and the need to encourage innovation and investment, it seems dangerous to interfere with heavy-handed regulation Read More ›

You’ve probably heard of online phishing, where Web stalkers purloin sensitive information through trickery and deceit. But you will be glad to know legislatures across the country are banning an even more serious form of online predation. The Humane Society of the United States last year mailed more than 50,000 people an urgent message, underlined and in bold type: “Such horrific cruelty must stop and stop now!” The cruelty in question was Internet hunting, which the animal-rights group described as the “sick and depraved” sport of shooting live game with a gun controlled remotely over the Web. Responding to the Humane Society’s call, 33 states have outlawed Internet hunting since 2005, and a bill to ban it nationally has been Read More ›

This week in the Tech Policy Weekly podcast, Adam Thierer, James Gattuso, Jerry Brito, Tim Lee and I discuss FCC Chairman Kevin Martin’s reported plan to encumber a portion of the 700 MHz band with open access rules sought by Frontline Wireless LLP, Google and others. We react to a statement issued by a top executive at AT&T claiming that the draft FCC order — which none of us have seen — would “simply take one block of the upper 700 band being auctioned to allow an experiment with an alternative open-devices/open applications business model of the type proposed by Google and others,” and that “the proposal does not mandate a wholesale business model in any particular block, nor does Read More ›

Google wants the Federal Communications Commisison to make net neutrality a licensing requirement in the Upper 700 MHz spectrum band — “(1) open applications, (2) open devices, (3) open services, and (4) open access.” According to media reports, FCC Chairman Kevin Martin is circulating draft rules which would impose such a requirement (see: this, this and this). What’s Martin’s agenda? I suspect he thinks he’s come up with a brilliant strategic maneuver — give Google the chance to acquire a nationwide broadband wireless footprint on the cheap and maybe the company will give up funding the advocates of net neutrality regulation. AOL ended its support for open access the minute it merged with Time Warner, didn’t it? But as we Read More ›

The Federal Trade Commission is “unaware of any significant market failure or demonstrated consumer harm from conduct by broadband providers,” according to a Staff Report on Broadband Connectivity Competition Policy, which advises: Policy makers should be wary of enacting regulation solely to prevent prospective harm to consumer welfare, particularly given the indeterminate effects on such welfare of potential conduct by broadband providers and the law enforcement structures that already exist. The report indicates FTC staff believes it is “impossible to determine in the abstract” whether allowing content and applications providers (or even end users) to pay broadband providers for prioritized data transmission will be beneficial or harmful to consumer welfare. Similarly, staff feels broadband providers have “conflicting incentives” relating to Read More ›

Google makes some excellent points in the comments it filed with the Federal Communications Commission in a proceeding examining proposals for network neutrality regulation. First, Google argues that packet prioritization (i.e., Quality of Service) is a “poor proxy for additional bandwidth.” [T]he engineers at Internet2 conducted a detailed technical analysis of QoS in broadband networks. Their conclusion is that QoS is a relatively poor proxy for additional bandwidth: In most bandwidth markets important to network-based research, it is cheaper to buy more capacity and to provide everybody with excellent service than it is to mess with QoS. In those few places where network upgrades are not practical, QoS deployment is usually even harder (due to the high cost of QoS-capable Read More ›

David Isenberg says investment-killing Net Neutrality regulations aren’t enough. What we really need is something more draconian…more radical…more “permanent”….What we really need, Isenberg says, is “structural separation” that would break up the cable and telecom companies and confine their business to a superslim niche of delivering bits. In other words, prohibit the communications providers from selling applications or content or services. Digital technology and abundant bandwidth is pushing in this direction over the long term — it’s what we call the separation of content and conduit, where specialization yields (1) network companies that primarily supply bandwidth and (2) app, content, and services firms that focus on software, videos, e-mail, etc. But it is not an absolute law of business or Read More ›

Stephen B. Pociask of the American Consumer Institute finds that broadband services are very price sensitive. just a $5 increase in price could lead to a 15% drop in total broadband subscribership and a 60% decline in demand for lower-income, price sensitive consumers. The study can be found here. Price increases are likely to occur as a result of network neutrality regulation, according to Pociask. It which would preclude network providers from experimenting with different pricing or service models, forcing consumers to bear the entire cost of network upgrades.

Japan has 7.2 million all-fiber broadband subscribers who pay $34 per month and incumbent providers NTT East and NTT West have only a 66% market share. According to Takashi Ebihara, a Senior Director in the Corporate Strategy Department at Japan’s NTT East Corp. and currently a Visiting Fellow at the Center for Strategic and International Studies here in Washington, Japan has the “fastest and least expensive” broadband in the world and non-incumbent CLECs have a “reasonable” market share. Ebihara was speaking at the Information Technology and Innovation Foundation, and his presentation can be found here. Ebihara said government strategy played a significant role. Local loop unbundling and line sharing led to fierce competition in DSL, which forced the incumbents to Read More ›

The Federal Communications Commission will conduct an inquiry into broadband market practices that will hopefully lead to a more fact-specific discussion around net neutrality regulation. Commissioner Michael J. Copps complained that “we proceed too leisurely here,” warning that broadband providers can build networks with “traffic management policies that could restrict how we use the Internet.” Don’t take my word for it. It was the Wall Street Journal that said large carriers “are starting to make it harder for consumers to use the Internet for phone calls or swapping video files.” Copps didn’t mention that the same article highlighted the burden that a small number of users impose on the network and that it’s unfair to the ordinary users. In August Read More ›