Former TLF blogger Tim Lee returns with this guest post. Find him most of the time at the Bottom-Up blog.
Thanks to Jim Harper for inviting me to return to TLF to offer some thoughts on the recent Adam Thierer–Tim Wu smackdown. I’ve recently finished finished reading The Master Switch, and I didn’t have have my friend Adam’s viscerally negative reactions.
To be clear, on the policy questions raised by The Master Switch, Adam and I are largely on the same page. Wu exaggerates the extent to which traditional media has become more “closed” since 1980, he is too pessimistic about the future of the Internet, and the policy agenda he sketches in his final chapter is likely to do more harm than good. I plan to say more about these issues in future writings; for now I’d like to comment on the shape of the discussion that’s taken place so far here at TLF, and to point out what I think Adam is missing about The Master Switch.
Here’s the thing: my copy of the book is 319 pages long. Adam’s critique focuses almost entirely on the final third of the book, (pages 205-319) in which Wu tells the history of the last 30 years and makes some tentative policy suggestions. If Wu had published pages 205-319 as a stand-alone monograph, I would have been cheering along with Adam’s response to it.
But what about the first 200-some pages of the book? A reader of Adam’s epic 6-part critique is mostly left in the dark about their contents. And that’s a shame, because in my view those pages not only contain the best part of the book, but they’re also the most libertarian-friendly parts.
Those pages tell the history of the American communications industries—telephone, cinema, radio, television, and cable—between 1876 and 1980. Adam only discusses this history in one of his six posts. There, he characterizes Wu as blaming market forces for the monopolization of the telephone industry. That’s not how I read the chapter in question. Continue reading →
Proponents of Net neutrality regulation continue their full-court press to get the Federal Communications Commission (FCC) and its chairman, Julius Genachowski, to unilaterally push through a new industrial policy regime for the Internet. The latest word, according to Politico, is that the agency is pushing back its scheduled December open meeting from Dec. 15 to Dec. 21 to give the agency more time to plot its next move. There’s no word yet what the agency’s regulatory blueprint will look like, so it’s impossible to critique the agency’s plan at this point. I’ve made the case against Net neutrality regulation here before, however, and I’m sure those same concerns and critiques will apply to whatever the agency ends up adopting.
What’s most concerning about the way this process is playing out currently is just how anti-democratic it is. I understand the zeal of the pro-regulatory forces on this issue, but there is simply no good excuse for advocating that 3 unelected officials at an independent regulatory agency rush through a vote to regulate a such a massive and important sector of the American economy.
It used to be the case that a broad and non-partisan coalition of academics and organizations supported the non-delegation principle, which, generally speaking, refers to the notion that only democratically elected officials should be in a position to pass laws and make the really important decisions about the future course of our polity and its economy. Of course, when it comes to the economy, I’d prefer most of those decisions be left to marketplace experimentation. However, to the extent regulation is deemed necessary and that regulation governs such a massively important portion of the American economy, that determination should definitely be made by elected leaders in Congress and not delegated to bureaucrats who would ram through regulations with 3 votes and sketchy plan for reordering that sector. Continue reading →
[This guest post is by Joshua Wright (George Mason University) and Geoffrey Manne (International Center for Law & Economics), who blog regularly at Truth on the Market]
We’ve been reading with interest a bit of a blog squabble between Tim Wu and Adam Thierer (see here and here) set off by Professor Wu’s WSJ column: “In the Grip of the New Monopolists.” Wu’s column makes some remarkable claims, and, like Adam, we find it extremely troubling.
Wu starts off with some serious teeth-gnashing concern over “The Internet Economy”:
The Internet has long been held up as a model for what the free market is supposed to look like—competition in its purest form. So why does it look increasingly like a Monopoly board? Most of the major sectors today are controlled by one dominant company or an oligopoly. Google “owns” search; Facebook, social networking; eBay rules auctions; Apple dominates online content delivery; Amazon, retail; and so on.
There are digital Kashmirs, disputed territories that remain anyone’s game, like digital publishing. But the dominions of major firms have enjoyed surprisingly secure borders over the last five years, their core markets secure. Microsoft’s Bing, launched last year by a giant with $40 billion in cash on hand, has captured a mere 3.25% of query volume (Google retains 83%). Still, no one expects Google Buzz to seriously encroach on Facebook’s market, or, for that matter, Skype to take over from Twitter. Though the border incursions do keep dominant firms on their toes, they have largely foundered as business ventures.
What struck us about Wu’s column was that there was not even a thin veil over the “big is bad” theme of the essay. Holding aside complicated market definition questions about the markets in which Google, Twitter, Facebook, Apple, Amazon and others upon whom Wu focuses operate—that is, the question of whether these firms are actually “monopolists” or even “near monopolists”—a question that Adam deals with masterfully in his response (in essence: There is a serious defect in an analysis of online markets in which Amazon and eBay are asserted to be non-competitors, monopolizing distinct sectors of commerce)—the most striking feature of Wu’s essay was the presumption that market concentration of this type leads to harm.
Continue reading →
As he noted, Adam Thierer’s lead article in the most recent Cato Policy Report is called “The Sad State of Cyber-Politics.” It goes through so many ways tech and telecom companies are playing the Washington game to win or keep competitive advantage.
It’s a nice set-up to a Washington Post opinion piece from this weekend in which TownFlier CEO Morris Panner talks about the growing riches accruing to Washington influencers:
We are creating so much regulation – over tax policy, health care, financial activity – that smart people have figured out that they can get rich faster and more easily by manipulating rules on behalf of existing corporations than by creating net new activity and wealth. Gamesmanship pays better than entrepreneurship.
Thierer sees some hope for the tech sector, for a few reasons:
Smaller tech companies have thus far largely resisted the urge [to engage with Washington]. Hopefully that’s for principled reasons, not just due to a shortage of lobbying resources. Second, the esoteric nature of many Internet and digital technology policy discussions frustrates many lawmakers and often forces them to lose interest in these topics. Third, the breakneck pace of technological change makes it difficult for regulators to bottle up innovation and entrepreneurialism.
Panner’s broader piece calls for “a national campaign to create transparency in our legislation and a national moratorium on the creation of commissions, regulators and czars. It is time for Congress to do the hard job of saying what lawmakers mean in clear and easy-to-understand language.” He continues, “We should reject bills that are thousands of pages or that delegate vast authority to unelected regulators.”
That would be a start.
I published an opinion piece today at CNET, calling on all tech stakeholders in Washington to stop the pointless quibbling and sniping about net neutrality, reclassification, and other side-show issues. (I’m too depressed to list them here—but see “Fox-Cablevision and the Net Neutrality Hammer” for an example of just how degraded the conversation has become.)
Instead, why not focus on a positive message, one that has the potential for win-win-win-win? For example, the National Broadband Plan, issued in March, eloquently made the case for a U.S. commitment to universal broadband adoption. Not as a matter of gee-whiz futurism but in the interest of giving Americans “a better way of life.”
Continue reading →
At BIGGOVERNMENT.com, Seton Motley takes the effort to regulate Internet service provision in the name of neutrality and stomps on it with both feet.
If this were high school (and politics really sort of is), Net Neutrality would be sitting alone at lunch — shunned even by the members of the marching band and the audio-visual club. Having had its lunch money taken, it would have only enough for milk (and would sadly be unable to open the container). It would be planning to take its aunt to prom.
His brief, unkind history takes the push for Internet regulation from its bright beginnings in 2006 through a four-year-long fade. It ends with the PR catastrophe the Progressive Change Campaign Committee produced when it signed 95 Democratic candidates onto a “Network Neutrality Pledge” and they all lost.
That fiasco doesn’t reveal anything about the merits of the proposal to turn Internet service providers into federally regulated public utilities. But it is emblematic of the immaturity and amateurishness of the push for net neutrality regulation. The effort never fixed on an actual, defined problem. Instead it rotated through corporate missteps with text message services, with web sites, and sometimes with actual Internet service. The movement was long on slogans and short on concrete proposals.
Proponents of net neutrality regulation never answered the conundrum posed by “regulatory capture”—that the FCC they wanted to “control” ISPs might end up controlled by them. They never countered the point that technologists and marketplace actors would husband the behavior of ISPs, a point made ably by Tim Lee in his paper, The Durable Internet.
Motley caps off his cyberbullying of the Internet regulation effort with an Examiner piece today noting that the Progressive Change Campaign Committee raised a pitiful $300 for its efforts.
[W]ith the PCCC’s feeble efforts and Tuesday’s historic pro-freedom Congressional demographic shift – the free market, free speech assault that is Net Neutrality now lies broken on the ash heap of Internet and tech history. To which we say – good riddance to bad rubbish.
If the push for net neutrality regulation survives, it will have to regroup/grow up, identify a concrete problem and a defensible solution, and then carry that credible message beyond its own echo chamber. All in all, the movement to regulate net neutrality seems to have been “playing at” advocacy rather than seriously advocating.
The Federal Communications Commission has established a new advisory group called the “Technological Advisory Council.” Among other things it will advise the agency on “how broadband communications can be part of the solution for the delivery and cost containment of health care, for energy and environmental conservation, for education innovation and in the creation of jobs.”
This is an agency that is radically overspilling its bounds. It has established goals that it has no proper role in fulfilling and that it has no idea how to fulfill. As we look for cost-cutting measures at the federal level, we could end the pretense that communications industry should be regulated as a public utility. Shuttering the FCC would free up funds for better purposes such as lowering the national debt or reducing taxes.
When the only tool you have is a hammer, as the old cliché goes, everything looks like a nail.
Net neutrality, as I first wrote in 2006, is a complicated issue at the accident-prone intersection of technology and policy. But some of its most determined—one might say desperate—proponents are increasingly anxious to simplify the problem into political slogans with no melody and sound bites with no nutritional value. Even as—perhaps precisely because—a “win-win-win” compromise seems imminent, the rhetorical excess is being amplified. The feedback is deafening.
In one of the most bizarre efforts yet to make everything be about net neutrality, Public Knowledge issued several statements this week “condemning” Fox’s decision to prohibit access to its online programming from Cablevision internet users. In doing so, the organization claims, Fox has committed “the grossest violations of the open Internet committed by a U.S. company.”
This despite the fact that the open Internet rules (pick whatever version you like) apply only to Internet access providers. Indeed, the rules are understood principally as a protection for content providers. You know, like Fox. Continue reading →
I’d like to draw your attention to a recently released [GAO](https://docs.google.com/viewer?url=http://energycommerce.house.gov/Press_111/20101012/GAO.Report.Broadband.2010.pdf) report analyzing the challenge of implementing the 200+ recommendations included in the FCC’s Broadband Plan and comparing the U.S. to broadband efforts in other countries. Turns out things are not as dire as the FCC and the Administration would have us believe. Some highlights:
– Broadband internet is available to 95 percent of American households. This is comparable to other developed nations despite the U.S.’s larger geographic size and population.
– “[T]he United States has more subscribers than any other OECD country—81 million, or more than twice as many as Japan, which has 31 million, the second highest number of subscribers.”
– The U.S. broadband adoption rate is 26.4 subscriber lines per 100 inhabitants, which is higher than the 23.3 average for developed countries.
So we have more subscribers than any other developed nation by more than double, and almost all households have access to broadband. I know it’s not fashionable to say, but it looks like we’re doing pretty damn well.
This might explain the results of a Pew Internet and American Life [survey](http://pewresearch.org/databank/dailynumber/?NumberID=1071) released last month that found that “A majority of Americans (53%) do not believe that increasing the availability of affordable high-speed internet connections should be a federal government priority.” Interestingly, Americans who do not use the Internet are the least interested in seeing government spending on broadband—presumably for them. “Fully 45% of non-users say the government should not attempt to make affordable broadband available to everyone, just 5% say access should be a top priority.”
Continue reading →
Today’s hot topic is that thousands of Cablevision customers in New York were faced with blacked out News Corp. channels, including Fox, when the two companies were not able to come to an agreement on fees. As a result, Cablevision did not carry the Giants-Lions game and may not carry the next game against the Cowboys. Glee on Tuesday is certainly threatened, and I feel for Cablevision because I wouldn’t wish a spurned Glee fan’s wrath on anyone.
The beautiful thing about this event is that the FCC has put out a Consumer Advisory enumerating all the various choices available to consumers. They can switch to a different pay service, and the FCC counts five: “AT&T, DIRECTV, DISH Network, RCN (limited areas of Brooklyn), and Verizon FIOS.” They can also tune in via over-the-air (rabbit ears) broadcast.
This hasn’t stopped Congress or “consumer advocates” from going apoplectic over American’s god-given right to the Simpsons. And, since it seems News Corp. cut access to Fox shows on Hulu.com and Fox.com for Cablevision internet service subscribers, they fear this is terrible violation of net neutrality.
Let’s put aside for a moment whether it’s a net neutrality violation or not since it’s difficult to tell what that means. (Notice that in this case is not big telecom carriers blocking access to content they don’t like, it’s a content provider blocking an ISP.) What exactly is the problem here?
Given that the FCC has helpfully pointed out all the options available to Consumers, there’s little chance that a consumer who wants to get Fox content won’t be able to do so. If Cablevision and News Corp. don’t come to an agreement, and Cablevision doesn’t carry Fox, consumers who value Fox will switch to a different service. The same goes for Internet service. The important issue here is not a universal human right to content or a net neutrality principle, but choice.
As long as there is market competition and consumer choice, we don’t need the FCC or Ed Markey to ensure that the we’ll get the Giants and the Cowboys in HD and Glee on Fox.com.
The Technology Liberation Front is the tech policy blog dedicated to keeping politicians' hands off the 'net and everything else related to technology.