Regulate the Internet? FCC.gov Has It Right

The FCC last Friday may have jumped with both feet into the business of regulating the Internet, but someone forgot to tell the folks that run the Commission’s website.   “The FCC Does Not Regulate the Internet or Internet Service Providers (ISP)” the “consumer publications” page of FCC.gov is still proudly telling visitors, referring them over to their state consumer protection office or to the Federal Trade Commission as the proper agencies for such things.

In the past, I’ve been critical of the shambolic way in which the FCC’s website is run.  But in this case, the problem isn’t with the web folks - they have the policy exactly right.  It’s the FCC, not FCC.gov, that’s bungled the job.

Someone at the Commission will eventually tell the website folks to fix the error.  But who will get the Commissioners to fix theirs?

Posted by James Gattuso on Aug. 6, 2008 | Link | Comments |

Cerf on managing networks & the need for industry discussion

Google’s Chief Internet Evangelist Vint Cerf, one of the fathers of the Net, has a very thoughtful post up on the Google Public Policy Blog today asking “What’s a Reasonable Approach for Managing Broadband Networks?” He runs through a variety of theoretical approaches to network load management. There’s much there to ponder, but I just wanted to comment briefly on the very last thing he says in the piece:

Over the past few months, I have been talking with engineers at Comcast about some of these network management issues. I’ve been pleased so far with the tone and substance of these conversations, which have helped me to better understand the underlying motivation and rationale for the network management decisions facing Comcast, and the unique characteristics of cable broadband architecture. And as we said a few weeks ago, their commitment to a protocol-agnostic approach to network management is a step in the right direction.

I found this of great interest because for the last few months I have been wondering: (a) why isn’t there more of that sort of inter- and intra-industry dialogue going on, and (b) what could be done to encourage more of it? With the exception of those folks at the extreme fringe of the Net neutrality movement, most rational people involved in this debate accept the fact that there will be legitimate network management issues that industry must deal with from time to time. So, how can we get people in industry — from all quarters of it — to sit down at a negotiating table and hammer things out voluntarily before calling in the regulators to impose ham-handed, inflexible solutions? What we are talking about here is the need for a technical dispute resolution process that doesn’t involve the FCC.
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Posted by Adam Thierer on Aug. 4, 2008 | Link | Comments |

Tim Wu’s “Mother-May-I” World of Net Neutrality Regulation

Tim Wu has an absurd piece in today’s New York Times comparing America’s broadband marketplace to OPEC. This really is quite outrageous, beginning with the fact that OPEC is a GOVERNMENT-RUN cartel. Wu also had a comment in the Washington Post today saying that he didn’t think broadband metering was an outrage. Well, that’s nice. I’m happy that we have Tim’s permission to experiment with new business models for financing broadband networks going forward!

This is indicative of what we can expect in the future once Net neutrality laws get on the books: A world of incessant “Mother may I?” permission-based forms of preemptive Internet regulation. Tim and his radical band of regulatory advocates over at Free Press will incessantly petition the FCC to review each and every business model decision and encourage the unelected bureaucrats at the agency to manage the Internet to their heart’s content.

And what does Tim offer for an alternative vision of the way the world should work since he doesn’t believe private markets can handle the job? Well, it’s back to the Big Government drawing board for more tax-spend-and-subsidize solutions! “Amsterdam and some cities in Utah have deployed their own fiber to carry bandwidth as a public utility,” he says. Yeah, that’s the promised land. After all, it’s working out soooooo well at the municipal level. Please.

Posted by Adam Thierer on Jul. 30, 2008 | Link | Comments |

Australian ISP-Level Content Filtering Report Released

The Australian government has been running a trial of ISP-level filtering products to determine whether network-based filtering could be implemented by the government to censor certain forms of online content without a major degradation of overall network performance. The government’s report on the issue was released today: Closed-Environment Testing of ISP-Level Internet Content Filtering. It was produced by the Australian Communications & Media Authority (ACMA), which is the rough equivalent of the Federal Communications Commission here in the U.S., but with somewhat broader authority.

The Australian government has been investigating Internet filtering techniques for many years now and even gone so far to offered subsidized, government-approved PC-based filters through the Protecting Australian Families Online program. That experiment did not end well, however, as a 16-year old Australian youth cracked the filter within a half hour of its release. The Australian government next turned its attention to ISP-level filtering as a possible solution and began a test of 6 different network-based filters in Tasmania.

What makes ISP-level (network-based) filtering an attractive approach for many policymakers is that, at least in theory, it could solve the problem the Australian government faced with PC-based (client-side) filters: ISP-level filters are more difficult, if not impossible, to circumvent. That is, if you can somehow filter content and communications at the source–or within the network–then you have a much greater probability of stopping that content from getting through. Here’s a chart from the ACMA’s new report that illustrates what they see as the advantage of ISP-level filters:

ACMA 1
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Posted by Adam Thierer on Jul. 28, 2008 | Link | Comments |

Local Web Ads and the Future of Newspapers

advertising growth 2007 As we’ve discussed here before, newspapers are struggling. We all know that. The question is what, if anything, will save them? Most pundits tend to point to a two-fold solution: (1) get serious about leveraging the natural local advantages newspapers hold; (2) and find away to do so online as quickly as possible before they lose the bulk of the local online ad market to other competitors. This is why there’s a lot of talk these days about turning traditional papers into “hyper-local” web portals for their communities. Of course, there’s no guarantee that will work, especially in light of changing attitudes about “media localism.”

But let’s assume that that is indeed the best path forward. Will it really save newspapers? As eMarketer reports in today’s newsletter on “Can Local Web Ads Save Newspapers,” it’s a bit of a good news–bad news story:

The good news is that newspaper site ad revenues are growing along with other online ad spending, especially for local news sites. Local newspaper online ad revenues are predicted to reach $3.7 billion this year, according to eMarketer calculations based on Borrell Associates data.

The bad news is that this spending will not make up for print ad losses for some time, according to Lisa Phillips, senior analyst at eMarketer. Ms. Phillips noted that advertisers still pay more for print readers than for online readers. “This is a transition that will take several years,” she said. “Local advertisers are paying attention to the shift in reader behavior, but it will take a while for everyone to adjust.”

And so we will have to wait to see how it all plays out. But I am highly skeptical that traditional newspapers operators will be able to make up anywhere near the amount of revenue online that they are hemorrhaging over on the print side of the business. There’s just too much other competition out there online already for our eyes and ears. The age of “protectable scarcity” is dead and that means newspapers just don’t have the lock on local or regional markets they once did.

Posted by Adam Thierer on Jul. 22, 2008 | Link | Comments |

Exclusive Handset Prohibitions: Should the FCC Kill the Goose that Laid the Golden iPhone?

Goose that lays golden eggsIn a new PFF essay, my colleague Barbara Esbin and I address a recent petition filed by the Rural Cellular Association (RCA) asking the FCC to prohibit exclusive arrangements between wireless handset producers and carriers. The RCA petition claims that large wireless companies have an unfair market advantage by giving their customers exclusive access to certain advanced smart phones, such as the Apple/AT&T iPhone—and that this anticompetitive practice is harmful to rural consumers served by RCA members.

In the piece, we debunk RCA’s arguments premised on a supposed lack of competition in wireless markets. RCA will likely now redouble these arguments by pointing to Verizon’s planned acquisition of Alltel (by far the smallest of the “Big 5” carriers), which was announced the day our piece was published. But even with four large carriers instead of five, the wireless market remains vibrantly competitive—especially as compared to 1992, when the FCC decided that even the two-carrier market was “extremely competitive,” and rejecting arguments that it ban exclusive handset arrangements. Continue reading this post »

Posted by Berin Szoka on Jun. 10, 2008 | Link | Comments |

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