The Washington Posteditorializes this morning on the “Google-Verizon” proposal for government regulation of the Internet:
For more than a decade, “net neutrality” — a commitment not to discriminate in the transmission of Internet content — has been a rule tacitly understood by Internet users and providers alike.
But in April, a court ruled that the Federal Communications Commission has no regulatory authority over Internet service providers. For many, this put the status quo in jeopardy. Without the threat of enforcement, might service providers start shaping the flow of traffic in ways that threaten the online meritocracy, in which new and established Web sites are equally accessible and sites rise or fall on the basis of their ability to attract viewers?
What a Washington-centric view of the world, to think that net neutrality has been maintained all this time by the fear of an FCC clubbing. Deviations from net neutrality haven’t happened because neutrality is the best, most durable engineering principle for the Internet, and because neutral is the way consumers want their Internet service.
Should it be cast in stone by regulation, locking in the pro-Google-and-Verizon status quo? No. The way the Internet works should continue to evolve, experiments with non-neutrality failing one after another . . . until perhaps one comes along that serves consumers better! The FCC would be nothing but a drag on innovation and a bulwark protecting Google and Verizon’s currently happy competitive circumstances.
I’ll give the Post one thing: It represents Washington, D.C. eminently well. The Internet should be regulated because it’s not regulated.
“If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it.”
Two articles of interest in today’s Wall Street Journal with indirect impact on the debate over the future of Internet policy. First, there’s a front-page story (“Facing Budget Gaps, Cities Sell Parking, Airports, Zoo“) documenting how many cities are privatizing various services — including some considered “public utilities” — in order to help balance budgets. The article worries about “fire-sale” prices and the loss of long-term revenue because of the privatizations. But the author correctly notes that the more important rationale for privatization is that, “In many cases, the private takeover of government-controlled industry or services can result in more efficient and profitable operations.” Moreover, any concern about “fire-sale” prices and long-term revenue losses have to be stacked again the massive inefficiencies / costs associated with ongoing government management of resources /networks.
Of course, what’s so ironic about this latest privatization wave is that it comes at a time when some regulatory activists are clamoring for more regulation of the Internet and calling for broadband to be converted into a plain-vanilla public utility. For example, Free Press founder Robert McChesney has argued that “What we want to have in the U.S. and in every society is an Internet that is not private property, but a public utility.” That certainly doesn’t seem wise in light of the track record of past experiments with government-owned or regulated utilities. And the fact that we are talking about something as complex and fast-moving as the Internet and digital networks makes the task even more daunting.
Government mismanagement of complex technology projects was on display in a second article in today’s Journal (“U.S. Reviews Tech Spending.”) Amy Schatz notes that “Obama administration officials are considering overhauling 26 troubled federal technology projects valued at as much as $30 billion as part of a broader effort by White House budget officials to cut spending. Projects on the list are either over budget, haven’t worked as expected or both, say Office of Management and Budget officials.” I’m pleased to hear that the Administration is taking steps to rectify such waste and mismanagement, but let’s not lose sight of the fact that this is the same government that the Free Press folks want to run the Internet. Not smart.
The Progress and Freedom Foundation has just published a white paper I wrote for them titled “The Seven Deadly Sins of Title II Reclassification (NOI Remix).” This is an expanded and revised version of an earlier blog post that looks deeply into the FCC’s pending Notice of Inquiry regarding broadband Internet access. You can download a PDF here.
I point out that beyond the danger of subjecting broadband Internet to extensive new regulations under the so-called “Third Way” approach outlined by FCC Chairman Julius Genachowski, a number of other troubling features in the Notice indicate an even broader agenda for the agency with regard to the Internet. Continue reading →
Earlier this week, The Daily Show’s Jon Stewart summed up the debate over net neutrality by stating, “On one side [are] those who want the marketplace to remain a wide open market of ideas, and on the other side [is] a larger group who have no idea what net neutrality means.”
Stewart may have been joking, but he was right about one thing – many folks are confused about what net neutrality actually is and what it would mean for Internet users.
That’s why I decided to enter the America’s Got Net video contest, sponsored by the Open Internet Coalition, a pro-net neutrality trade association. In a short video entitled, “The Open Internet and Lessons from the Ma Bell Era,” I explain how mandating net neutrality would endanger the networks of tomorrow and insulate entrenched firms from competition. Enjoy!
A favorite PR maven pitched me (and probably many of you) Senator Al Franken’s (D-MN) email suggesting that WiFi is threatened by the Google-Verizon “deal.”
“The Google-Verizon ‘framework’ was written so as not to apply to wireless Internet services,” says Franken. “If you use wi-fi or access the Internet on your phone, this is a serious problem.”
Kindamaybenotsomuch. WiFi is wireless, yes, but it’s not what they’re talking about when they say “wireless.”
But what caught my eye is Senator Franken’s somewhat inverted take on power arrangements in the federal government: “This evening, I’ll be speaking at an FCC hearing in Minneapolis. I’ll urge the commissioners to reject the Google-Verizon framework, stop the Comcast/NBC merger, and take action to keep the Internet free and open.”
Folks, Article I, section 1 of the United States Constitution creates the United States Senate, with section 3 describing the Senate’s makeup and some procedures.
The Federal Communications Commission is not a constitutional body. The best view is that Congress has no authority to establish an FCC like we have today. The better view is that Congress should not maintain the sprawling FCC we have today. And the only correct view is that FCC is a creation of Congress, beneath it in every relevant respect.
Senator Franken is supposed to be the boss of the FCC, not a supplicant “urging” the FCC to do x, y, and z.
Does it matter a lot? No. Senator Franken is mostly making a symbolic appeal to gin up constituent support. But he’s also symbolizing the abasement of the legislative branch to an independent agency that has no constitutional pedigree.
Adam recently pointed to Robert Litan and Hal Singer’s new Harvard Business Review essay in which they defend ISPs’ right to offer special handling for certain packets. They write, “The ability to purchase priority delivery from ISPs would spur innovation among businesses, large and small. Priority delivery would enable certain real-time applications to operate free of jitter and generally perform at higher levels.”
I’ve recently begun to see this sort of argument used in the net neutrality debate more frequently. Where once the mantra of the opponents of regulation was that, thanks to competition, there has never been a serious case of discrimination so that government intervention was unnecessary, now we’re hearing more and more that innovation and investment will suffer if ISPs are not allowed to offer priority services over the internet.
What Litan and Singer explain about price discrimination and product differentiation is absolutely correct. What I don’t think they understand is that “priority delivery” of content over the internet is not within ISPs’ technical capability.
First, let’s be clear what we’re talking about here. As far as I understand it, net neutrality regulation would apply to communications over the internet, not simply to communications that happen to use internet protocol (IP). Consider services like ESPN360, or edge-caching a la Akamai, or imagine Google colocating their YouTube servers at Verizon’s offices. These techniques allow users to get packets over the internet quicker, but do nothing to violate neutrality. You can also imagine Comcast offering an IP-based video game service that, much like cable TV, creates a fast direct connection between Comcast and the user. In a sense, this is prioritization of packets, but not over the internet. If I’m not wildly off-base, this would not violate any of the major net neutrality proposals, either.
So if we’re not talking about colocating, edge-caching, or creating separate IP-based networks, how exactly would ISPs offer “priority delivery” of packets over the internet? Continue reading →
I thought I’d add a little addendum to my post below. I just think it’s cute how Google demanding a neutral wired Internet and a non-neutral wireless Internet totally serves its self-interest.
A neutral wired net was fine for them because edge-caching, private back-hauls, and other workarounds were available to them. They look like selfless champions of Internet ideals, but are meanwhile using every instrument at their disposal to gain an edge on the competition (as well they should, being a for-profit company).
Then this whole wireless craze comes along and the wireless Net doesn’t lend itself to those sorts of workarounds, so they need a new strategy. Prioritizing packets is the only way for Google to gain an edge in this space, so they have to “compromise” their “principled” position on neutrality.
Back in 2008 I wrote a lot about the kerfuffle that surrounded Google’s “OpenEdge” program, which was seen as an affront to net neutrality. Here’s a couple of the better posts on the topic:
That debate seems pretty similar to today’s, in that the issue was largely misunderstood, overreactions were plentiful, and semi-socialist nonsense about the Net belonging to “the people” was momentarily viewed as reasonable.
I hope that this blow-up passes just like the 2008 controversy did.
This debate is different in terms of network architecture as Google likely intends to pay Verizon for prioritization of its services over others, making the network decidedly non-neutral. But I think that’s a good thing.
Why? Because in 2008, Google’s dollars flowed into edge caching servers, not into wired networks themselves. While this relieved of some traffic near the core as I’ve outlined in the post linked to above, it didn’t give wired network providers any more resources to build more robust networks.
I continue to be mystified by the contention of some Net neutrality advocates that it is not a form of economic regulation. The reality, of course, is that Net neutrality would ban business models and necessitate price controls. If that ain’t regulation, I don’t know what is. As Robert Litan and Hal Singer note in their new Harvard Business Review essay, “Why Business Should Oppose Net Neutrality,” “Non-discrimination under the FCC’s net neutrality proposal means that ISPs cannot offer enhanced services beyond the plain-vanilla access service to content providers at any price.” Thus, any type of service prioritization or price discrimination would be prohibited under the FCC’s Net neutrality regulatory regime.
As I explained in this earlier essay and in the video below, this would be a disaster for investment, innovation, and consumer welfare. Differentiated and prioritized services and pricing are part of almost every industrial sector in a capitalistic economy, and there’s no reason things should it be any different for broadband. As Litan and Singer note, “The concept of premium services and upgrades should be second-nature to businesses. From next-day delivery of packages to airport lounges, businesses value the option of upgrading when necessary. That one customer chooses to purchase the upgrade while the next opts out would never be considered ‘discriminatory.'”
And let’s not forget, something has to pay for Internet access and investment in new facilities. Differentiated services can help by allowing carriers to price more intensive or specialized users and uses to ensure that carriers don’t have to hit everyone – including average household users – with the same bill for service. Why would we want to make that illegal through Net neutrality regulation and the misguided price control schemes of a bygone regulatory era?
The release of a joint policy framework from Google and Verizon this week touched off even more activity in the never-ending saga of Net Neutrality than the rumors about the possibility such an agreement was in the works did the week before.
Op-ed pages, business and technology news programs, and public radio’s precious moments were overrun with anxious talking heads denouncing or praising the latest developments, or even a few of us trying just to explain what was and was not actually being said and done.
That’s not how August is supposed to be in policyland, when Washington reverts to the swamp from which it came. (John Adams left early one summer during his Presidency and refused to return long after the heat had broken.) I had hoped at long last to get around to finalizing last year’s tax return or maybe fixing my perennially-broken irrigation system, but oh well. Continue reading →
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I thought I’d add a little addendum to my post below. I just think it’s cute how Google demanding a neutral wired Internet and a non-neutral wireless Internet totally serves its self-interest.
Back in 2008 I wrote a lot about the kerfuffle that surrounded Google’s “OpenEdge” program, which was seen as an affront to net neutrality. Here’s a couple of the better posts on the topic:
The Technology Liberation Front is the tech policy blog dedicated to keeping politicians' hands off the 'net and everything else related to technology.