Kevin Werbach’s “Only Connect” got quite a bit of attention in the blogosphere when it was unveiled, including a post here on TLF. The attention was well deserved. The paper does an excellent job of explaining what’s at stake in the network neutrality debate and elucidating the positions staked out by each side. His discussions of the complexities of discrimination, access tiering, quality-of-service, etc in sections III(B) and III(C) are especially well done. He seems more keenly attuned than most scholars to the challenges that a regulator tasked with enforcing a non-discrimination rule would face.
With that said, I think the paper suffered from a fundamental conceptual weakness that left me unpersuaded by his ultimate thesis: I wasn’t ultimately convinced that interconnection and non-discrimination are separate and distinct regulatory issues. To the contrary, I think the two are often intimately connected. An effective interconnection mandate almost always depends on ensuring that the terms of interconnection are non-discriminatory. If network owner A is forced to interconnect with network owner B against its will, there are a variety of ways A can retaliate by charging B unreasonable prices, dropping B’s packets, dragging its feet on installing B’s equipment, etc. In practice, a practical interconnection mandate will invariably require some network-neutrality-like regulations to make it effective. The converse is equally true: a legal rule mandating non-discriminatory routing policies is likely to require some regulation of interconnection terms in order to ensure that the regulated carrier doesn’t discriminate through the back door by only offering low-quality links to those carriers against whom it wishes to discriminate.
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I’m in the midst of a big writing project on network neutrality, and so I’m going to do a series of posts on papers I’ve been reading. Some of the material in these posts may find its way into the forthcoming paper. I’m going to start with “A Coasian Alternative to Pigovian Regulation of Network Interconnection,” a paper by two FCC economists, that purports to offer an alternative to the FCC’s current inter-carrier compensation regime whereby long-distance firms pay local exchange carriers to terminate calls to the LEC’s subscribers. I’m not specifically interested in telephone regulation, but Atkinson and Barnekov suggest their arguments apply to other networks as well, and they’re cited by others (including Kevin Werbach, whom I’ll discuss in a future post) in the network neutrality debate, so I thought it was worth reading.
It seems to have become trendy to label one’s policy prescriptions “Coasian,” and that’s how Atkinson and Barnekov frame their analysis. They argue that the FCC’s current compensation regime is “Pigouvian” because a government bureaucrat dictates the prices that network owners must pay each other for the privilege of interconnection. Under Atkinson and Barnekov’s alternative, the FCC would… dictate the prices that network owners must pay each other for the privilege of interconnection. But they think they have a formula that is less arbitrary than the formula currently being used, and would therefore better approach the Coasean ideal of clearly-defined property rights.
In a nutshell, when one network owner wished to connect with another network owner, Atkinson and Barnekov would have them calculate the total cost of interconnection and then split it down the middle. This total cost would not just include the costs of interconnection at the edge of the network (say, stringing fiber between their facilities) but also the increased cost imposed inside each network, such as the additional capacity one network would need to carry the other’s traffic. This total cost would be computed, it would be divided by two, and then one party would pay the other so that each bore half the total cost.
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Why would copyright holders choose to abandon their statutory rights and rely solely on their common law ones? A few “blockheaded” authors might do so non-monetary reasons, of course. Thanks to the combined effect of copyright misuse and § 505 of the Copyright Act, however, even crassly profit-maximizing copyright holders might find abandonment financially attractive.
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Nate Anderson has an Arsticle on the major new copyright bill introduced yesterday.
H.R. 4279 is the bill, named the Prioritizing Resources and Organization for Intellectual Property Act of 2007 by its sponsors. “PRO-IP,” get it?
As I write this, voting, commenting, and wiki edits on WashingtonWatch.com have barely begun. The current vote can be seen below, and your opinion can be registered by clicking the appropriate place:
Benefits of computer games for kids evidently include learning how to deal with an attacking moose. Do follow the link and read the comments, too… I especially like “maybe his nub sister body pulled” and the comment to follow.
Shane Harris of National Journal has a good article out on the telecom immunity question.
The “Blog Readability Test,” which claims to be able to determine “what level of education is necessary to understand your blog,” says that our Tech Liberation Front blog is just at the “High School” reading level.
I guess the engine behind this thing uses a Flesch-Kincaid Readability Test. That test judges “readability” by examining word length and sentence length. Longer words and sentences decrease “readability.”
I’ve always thought those Flesch-Kincaid tests were silly, but then I would think than since I am the king of the run-on sentence. My TLF blogging colleague Jim Harper is constantly getting on me about that fact since, by contrast, he is the master of brevity. Harper sometimes uses fewer words per sentence than Dr. Suess or EE Cummings.
But I now feel vindicated in some strange way, Jim, because all my run-on sentences may be the only thing keeping our score up at the “High School’ level! Dammit man, start using really big words–like honorificabilitudinitatibus and floccinaucinihilipilification–and make your sentences unnecessarily long like this one, which I am deliberately typing without end in order to shamelessly boost our Blog Readability Test score to the “Genius level” and save us the collective shame of being as easy to read as the Huffington Post!
For those TLF readers living in the Washington, DC area and interested in copyright policy, there’s a symposium this upcoming Monday at GWU on the relationship between universities and copyright law. Entitled “Copyright and the University: An Academic Symposium” and sponsored by the Copyright Alliance, the cast of speakers include Marybeth Peters, Director, U.S Copyright Office, Peter Jaszi, Professor, Washington College of Law, American University, and economist Michael Einhorn, among others. Could be interesting, and it’s free.
The front page of the Wall Street Journal Marketplace section today gave me some hope that my work and the work of many other libertarian geeks has had an impact. The WSJ concluded that while there are dominant forces like Google, Yahoo!, and Microsoft in the online advertising field, that the dynamism of the market allows for upstart companies to grab their share of the $16.9 billion online ad industry.
Pointing out that markets are dynamic and that dominance is at best temporary and always under threat from competitors or future competitors seems like economics 101, but the job nonetheless needs to be done. Our collective memory seems to resemble that of a goldfish as many in the media believe that Google is, always has been, and always will be the dominant force in online advertising.
Of course, if market dominance really perpetuated itself, MITS would dominate the PC market. After all, in 1975 the MITS Altair 8800 outsold its closest competitor, the IBM 5100, two to one. This despite the 5100’s advanced cassette tape drive!
One would expect that after 30 years, having started in such a dominant position, MITS would control the entire high-technology world. Yet, somehow MITS lost this market dominance. Even the blue monolith of IBM lost to an outside player, an upstart named Apple.
More on the WSJ piece by my colleague Ryan Radia at CEI’s OpenMarket.org.
Privacy is a dimension of goods and services just like any other – price, quality, customer service, “green” values, etc. As rarely as the consuming public demands privacy (alas), it’s worth pointing out when it does. I think the Facebook “beacon” brouhaha is a good example.
As I have yet to believe in the ‘phenomenon’ of social networking, I haven’t followed it carefully, but Facebook rolled out an ‘ingenious’ advertising program that – incidentally – was very privacy-invasive. After a week or two of unceasing derision from a number of quarters, the company has admitted error and backed away.
Now, I believe that this is the market functioning. The most persistent (and obnoxious!) critic of Facebook in my field of vision was ValleyWag. But MoveOn.org also petitioned the company, another iteration of market pressure – any such communication from the public implicitly threatens direct action against a company’s bottom line.
Others may believe that threatened complaints to the FTC prompted Facebook to see the error in its ways. These folks would accordingly credit government regulation and the threat of regulation.
It would be worth studying as an empirical matter what inputs Facebook CEO Mark Zuckerberg was exposed to, and what most influenced him and his team. I bet the derision of commentators and his local, tech-industry peers was strongest. That’s the market working.
But I’d be happy to consider better surmise – or even actual evidence!
The Technology Liberation Front is the tech policy blog dedicated to keeping politicians' hands off the 'net and everything else related to technology.
