Study: Net neutrality regulation would cost jobs

A study by Larry F. Darby, Joseph P. Fuhr, Jr., and Stephen B. Pociask of the American Consumer Institute concludes: Historical data suggest that for every $1 billion in revenue, “core” network companies provided 2,329 jobs, while non-network “edge” companies provided 1,199 (about half as many). This indicates that Net Neutrality rules that reduce revenues and growth for network companies, and transfer benefits (revenue or growth prospects) to non-network companies, are a barrier to job creation. Read the study here.

Broadband for all, or bigger government?

While the FCC considers whether to impose nondiscrimination and transparency regulation to all forms of broadband Internet access, Public Knowledge is proposing to subject broadband services to the same pervasive, overlapping, heavy-handed regulatory framework as century-old telephone service (see this and this) — a framework which a former FCC chairman during the Clinton Administration described as a hopeless “morass.”
PK is worried the U.S. Court of Appeals for the D.C. Circuit might rule in a pending case that the FCC doesn’t have jurisdiction to regulate broadband. The group also is fretting over a recent observation by AT&T that, “with each passing day, more and more communications service migrate to broadband and IP-based services,” leaving the public switched telephone network (“PSTN”) and plain old telephone service (“POTS”) we all grew up with “as relics of a by-gone era.”

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Duopoly shumopoly

Broadband regulation is justified — according to Lawrence E. Strickling, who is the Assistant Secretary of Commerce for Communications and Information — because a recent FCC report indicates that “[a]t most 2 providers of fixed broadband services will pass most homes. Furthermore, “50-80% of homes may get speeds they need only from one provider.”
Christine A. Varney, the Assistant Attorney General for Antitrust concurs, noting

It is premature to predict whether the wireless broadband firms will be able to discipline the behavior of the established wireline providers, but early developments are mildly encouraging.

These comments essentially parrot the views of some left-wing advocacy groups who are trying to engineer a revolution in communications policy, such as Free Press and Public Knowledge.

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State of IP

At Telephony Online, Rich Karpinski notes, In today’s carrier networks, IP may not always be hyped or even seen, but it is indeed everywhere — and in 2010, it’s only going deeper and making an even bigger impact. I think this protocol proliferation in the name of IP is the death rattle of the old network. IP is a data protocol so of course it dominated the enterprise market and it is prevalent on the Internet so of course Internet players such as Google want it to be upgraded for so-called Multimedia. But the message of all the brave talk about “ultimate outcomes that have yet to take hold today” is that once again it is becoming reasonable to predict Read More ›

Swanson on the problem with ‘net neutrality’

A must-read from Bret Swanson: Despite the brutal economic downturn, Internet-sector growth has been solid. From the Amazon Kindle and 85,000 iPhone “apps” to Hulu video and broadband health care, Web innovation flourishes. Mr. Genachowski heartily acknowledges these happy industry facts but then pivots to assert the Web is at a “crossroads” and only the FCC can choose the right path. The events of the last half-decade prove otherwise. Since 2004, bandwidth per capita in the U.S. grew to three megabits per second from just 262 kilobits per second, and monthly Internet traffic increased to two billion gigabytes from 170 million gigabytes–both tenfold leaps. * * * * At a time of continued national economic peril, the last thing we Read More ›

Mobile money

The Economist has a great special report on mobile phone service in developing countries. For one thing, “mobile money” is transforming the lives of ordinary people in areas with poorly-developed banking systems. … a new opportunity beckons: mobile money, which allows cash to travel as quickly as a text message. Across the developing world, corner shops are where people buy vouchers to top up their calling credit. Mobile-money services allow these small retailers to act rather like bank branches. They can take your cash, and (by sending a special kind of text message) credit it to your mobile-money account. You can then transfer money (again, via text message) to other registered users, who can withdraw it by visiting their own Read More ›

Now Verizon pulls the plug

Saul Hansell at the New York Times reports that Verizon has given up on the landline telephone business Speaking to a Goldman Sachs investor conference, Mr. Seidenberg said Verizon was simply no longer concerned with telephones that are connected with wires. * * * *By converting most of its landline operation to FiOS, Mr. Seidenberg said Verizon had a new opportunity to cut costs sharply. FiOS uses the decentralized structure of the Internet rather than the traditional design of phone systems, which route all traffic through a tree of regional, then local offices. “We don’t look any different than Google,” he said. “We can begin to look at eliminating central offices, call centers and garages.” In May, Hansell shrewdly asked Read More ›

Landline countdown

The Economist predicts If the decline of the landline [telephone] continues at its current rate, the last cord will be cut sometime in 2025. But if the telegraph is a guide, it may be longer than that: Western Union delivered the last telegram in early 2006, more than one hundred years after the telephone — although the telegraph was nearly irrelevant for most of that period. Still, the landline network furnishes a livelihood for hundreds of thousands of employees and more retirees than the auto industry. It’s a major contributor to nonprofit foundations, a significant source of union dues, a big affirmative action employer, a huge source of campaign contributions and it collects enormous tax revenues which politicians and bureaucrats Read More ›

Legacy regulation killed Google Voice

Reacting to Apple’s decision to not allow Google Voice for the iPhone, Wall Street Journal guest columnist Andy Kessler complains, It wouldn’t be so bad if we were just overpaying for our mobile plans. Americans are used to that–see mail, milk and medicine. But it’s inexcusable that new, feature-rich and productive applications like Google Voice are being held back, just to prop up AT&T while we wait for it to transition away from its legacy of voice communications. How many productive apps beyond Google Voice are waiting in the wings? So Kessler proposes a “national data plan.” Before we get to that, Kessler complains that margins in AT&T’s cellphone unit are an “embarrassingly” high 25%. He doesn’t point out that Read More ›

Special access, con’t.

Over at Broadband Politics, Brett Glass takes exception to what I have written about special access. Glass and I disagree on a couple factual matters, as well as on the big picture. One factual disagreement concerns the following observation by Glass: Despite the fact that it’s absolutely essential to the provision of many services, prices for it are held in check neither by competition nor by even a minimal amount of oversight. It’s thus an area that’s ripe for price gouging and anticompetitive tactics, both of which are occurring. In fact, special access pricing is only deregulated in areas where competition exists. In noncompetitive areas, special access prices are still regulated. Also, Glass and I draw opposite inferences from his Read More ›