Bill Moyers has an incredibly one-sided special on PBS tonight on telecom policy. So far, about halfway through the program, the anti-regulatory side has been represented by Mike McCurry and one Republican Congressman. McCurry was billed as a lobbyist for the telecom industry, and his every sentence was followed by a rebuttal from a pro-regulatory representative. The pro-regulatory side has gotten roughly a dozen representatives, none of whom were labeled as lobbyists for Google or Microsoft. They got lengthy interviews consisting mostly of softball questions.
Astonishingly, Mark Cooper of the Consumer Federation of America cited the Interstate Commerce Act, which imposed nondiscrimination rules on the railroad industry, as a model for network neutrality regulation. As I explained in the New York Times back in August, they’d be wise to pick a different example:
After President Grover Cleveland appointed Thomas M. Cooley, a railroad ally, as its first chairman, the commission quickly fell under the control of the railroads, gradually transforming the American transportation industry into a cartel. By 1935, when it was given oversight of the trucking industry, the commission was restricting competition and enabling price increases throughout virtually the entire surface transportation industry. Decades later, in 1970, a report released by a Ralph Nader group described the commission as “a forum at which transportation interests divide up the national transportation market.”
Of course, viewers of Moyers’s show didn’t hear that side of the story, as they didn’t bother to ask any critics of regulation to respond to Cooper’s arguments.
The cover may feature Kim Jong-il, but you should skip past all that nuclear weapons stuff when you read this week’s Economist magazine and go straight to their special survey on telecommunications. In typical Economist fashion, the series of articles–cited earlier by Jim Harper–covers the length and breath of telecommunications from a global perspective.
Being fairly parochial, however, I found their comments on the neutrality regulation debate in the U.S. of particular interest:
…self-styled defenders of the internet like to portray the net-neutrality debate as a fight to stop evil telecoms firms messing with freedom and innovation. The reality is rather more complicated. For a start, the internet is not, in fact, neutral today. Fast broadband connections already cost more than slower ones, for consumers and businesses alike. As well as buying fast pipes and building huge “server farms”, big companies such as Google and eBay also pay extra for specialist “content delivery” services, such as Akamai, to make their websites download even faster. None of this has hampered innovation or hurt small companies.
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Here’s Yochai Benkler’s take on the evolution of the telecom sector, from page 152 of The Weatlh of Networks:
Throughout most of the 1990s and currently, communications and information policy around the globe was guided by a wish to “let the private sector lead,” interpreted in large measure to mean that the various property and property-like regulatory frameworks should be strengthened, while various regulatory constraints on property-like rights should be eased. The drive toward proprietary, market-based provisioning of communications and information came from disillusionment with regulatory systems and state-owned communications networks… In the United States, this model translated into efforts to shift telecommuniations from the regulated monopoly model it followed throughout most of the twentieth century to a competitive market, and to shift Internet development from being primarily a government-funded exercise, as it had been from the late 1960s to the mid 1990s, to being purely private property, market based. This model was declared in the Clinton administration’s 1993 National Information Infrastructure: Agenda for Action, which pushed for privatization of Internet deployment and dvelopment. It was the basis of that administrations’s 1995 White Paper on Intellectual Property, which mapped the most aggresssive agenda ever put forward by any American administration in favor of perfect enclosure of the public domain; and it was in those years when the Federal Communications Commission (FCC) first implemented spectrum auctions aimed at more thorough privatization of wireless communications in the United States…
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Tim Lee recently posted about Norwegian ISP NextGenTel returning to neutral provision of broadband after consumers objected to its practice of charging content providers for throughput.
It looks like Columbia law professor and champion of net neutrality regulation Tim Wu might be reading Lee – oh, and me. From the October 14 Economist:
“The public reaction has already been as powerful and effective as any law,” says Timothy Wu, a professor at Columbia Law School who is credited with coining the term “net neutrality”. The debate has put the telecoms companies on notice that they are being watched closely, he says, and has forced them to make public pledges not to block or degrade access. “Shame can have more power than litigation,” says Mr Wu. “The market and consumers can control bad practices, but consumers actually have to be aware of what is going on for that to happen.”
It’s an interesting strategic and ethical question whether brandishing the regulation cudgel is appropriate, but as long as we’re all agreed that consumers have influence in the broadband marketplace, I’m willing to let it go at that.
Via EFF, a Norwegian company, NextGenTel, apparently decided to limit the bandwidth of sites that didn’t pay NextGenTel extra for the privilege of offering high-speed content to their customers. After a consumer backlash, however, the ISP backed down:
It seems like the customers won this battle (link, to Norwegian article). Due to bad publicity and reactions from customers NextGenTel have removed the limit and NRK is now back on full speed in their network. What should I say? Thanks to the people contacting NextGenTel and to the blogs and media that understand how this was a serious violation to network neutrality.
A lot of pro-regulatory folks assume that “network neutrality is good” necessarily implies “network neutrality ought to be mandated by the government. But the latter doesn’t automatically follow from the former. Government regulation is a cumbersome process fraught with potentials for unintended consequences. If violations of network neutrality can be dealt with in the marketplace, that strikes me as a far better solution.
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Great article this week in the Financial Times by Tom Hazlett of George Mason University. Keying off from the Google-YouTube deal, Hazlett–a former FCC chief economist–writes that the Internet has never been as “open” as net neutrality fans say, and that’s no bad thing:
…the capitalist engine that powers the internet demands something completely different, as Google’s acquisition of YouTube makes clear. That strategy is to integrate Google’s search and advertising sales with YouTube’s users, which could potentially impede access to one of the hottest technologies by other service providers…
The internet lurches forward in spasms of business model discovery, as when Google figured out how to auction off search-targeted advertising slots, leaving banner advertisements behind. Today, Google’s absorption of its little video cousin is part of this jockeying for positions of competitive superiority. The internet really is not open–if, as Google hopes, it is doing it right.
Google has been doing it flawlessly–forging exclusive bargains nonpareil. Mr Vise declares the watershed business event in the company’s history to have occurred on May 1 2002 when its search engine was licensed to AOL. “Web properties that connected more than 34m subscribers had a small search box on every page that said, ‘Search Powered by Google.'” To land this deal, Google extended to “AOL a very large financial guarantee”, including stock options. An ISP getting paid to feature a favoured search engine? What net neutrality would presumably end is what helped launch Google.
Worth reading.
If you lose a battle, sometimes the best thing you can do is make it sound like a victory. That’s seems to be the only explanation for a truly bizarre article that appeared on Salon.com yesterday regarding the net neutrality battle. The lead in to the story sets the tone:
“In the Capitol Hill battle over Net neutrality, a ragtag army of grass-roots Internet groups, armed with low-budget videos, music parodies and petitions, have the corporate telecoms, and their allies in Congress, on the run.”
Good lead. Too bad it’s almost entirely fiction. To start with, it is beyond belief that anyone is still peddling this as a David v. Goliath story. The pro-regulation camp a rag-tag army? How
ragtag can you be when you count some of the largest corporations on Planet Earth– including both Google and Microsoft–on your side? In fact, the combined market cap of the major “pro-regulation” firms actually exceeds that of their major opponents. (The article does acknowledge the presence of these corporate giants in the pro-reg camp, conceding “[t[hey’ve spent millions to slug it out with the telecom companies,” but dismisses this with the non-sequiterish statement: “they’ve yet to land a knockout blow.”)
But wait, there’s more. Daniel Reilly, the author of the piece, trots out Sergey Brin–the co-founder of Google–as further proof of the ragtag nature of this battle, colorfully pointing out that Brin showed up to lobby on Capitol Hill “wearing jeans, a T-shirt and sneakers.” Well, there’s a real grassroot for you. Of course, he doesn’t mention that poor Brin is the 12th richest man in America, with a net worth of $14.1 billion dollars, according to Forbes.
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I hope the guys at Techdirt don’t mind me ripping off entire posts, because they’re too good, and too short, to excerpt:
Sometimes on the internet, things break. With so many pieces of network gear between a user, their ISP and a content provider’s servers, it’s not unreasonable that something goes down, gets misconfigured, or unplugged every once in a while. Something along those lines happened yesterday at Comcast, when a DNS server failed, temporarily blocking users from accessing Google and some other sites–and then the conspiracy theories started flying, with plenty of commenters fingering net neutrality even after the problem had been resolved, and the truth of the equipment failure had come out. The upshot of this isn’t to point out trigger-happy commenters ready to jump all over ISPs before the truth comes out, but rather that it illustrates just how difficult telcos have made it for themselves–should they ever actually go so far as to follow through on any of their inflammatory rhetoric about blocking or degrading the traffic of sites that won’t pay protection money. The tremendous amount of press this issue has gotten, fueled by the exaggerated and dishonest claims from people on both sides of the issue has made a lot of consumers hyper-sensitive and imagining “net neutrality violations” where they don’t exist. It’s seemed pretty clear all along that any telco stupid enough to block access to something like Google in the middle of this highly charged debate would be shooting itself in the foot; but these sorts of reactions to network outages and problems reiterate that even if telcos have the right to demand payments from content providers and block traffic, doing so would be commercial suicide.
I think this illustrates the virtues of the Felten thesis: threatening to enact new regulations may be more effective than actually enacting them. Even if the pro-regulatory side ultimately loses the legislative battle, the mere fact that we had a big debate about it means that a lot more people are now paying attention to the importance of network neutrality principles, and it’s likely to intensify the backlash should the telcos do anything shady in the future.
Ars has an interesting story about three California colleges that have decided to ban Skype from its campus. The school administrators have what strikes me as a puzzling attitude toward the service, describing it as a “potentially illegal waste of resources,” without explaining what might be illegal about it. Perhaps they’ve somehow gotten the erroneous impression that there’s something inherently illicit about “grid-computing-like” network applications.
Aside from legal concerns, the other issue seems to be bandwidth:
according to the Office of Information Technology, the chief problem comes when a Skype client acts as a “supernode” and makes itself available to relay calls made by other users. Having numerous supernodes on a school network increases bandwidth consumption and has a detrimental impact on connectivity, according to the memo. Anecdotal reports from individual Skype users reveal that bandwidth consumption can increase by as much as an entire gigabyte per month for a single Skype client when it acts as a supernode.
If my math is right, 1 gigabyte per month is roughly 3 kilobits per second, a trivial amount of bandwidth on a modern campus network. Even if the bandwidth is concentrated in shorter bursts–say, if the whole gigabyte is transmitted in a single hour–that’s still a rate of only 2.2 megabits per second–roughly the bandwidth of a typical DSL line. This is not a particularly abusive use of the network.
Supporters of neutrality regulation often claim the mantle of defenders of free speech. Even the pending Senate telecom bill–which largely avoids comprehensive neutrality rules–includes a section on “Application of the First Amendment,” stating that no ISP may limit content based on “religious views, political views, or any other views expressed in such content.”
The problem, however, is that the First Amendment covers governmental, not private restrictions on speech. Moreover, as Randy May of Maryland’s Free State Foundation argues this week in Broadcasting and Cable magazine, such limits may violate–rather than further–First Amendment principles. As he points out:
Under traditional First Amendment jurisprudence, it is as much a free-speech infringement to compel an entity to convey messages it does not wish to convey as it is to prevent it from conveying messages it wishes to convey.
Going farther, he says that:
….When you think about it, laws imposing “neutrality” are eerily reminiscent of the defunct Fairness Doctrine that required broadcasters to present a balanced view of controversial issues.
The last point is particularly interesting. Given that a fair number of neutrality regulation proponents have also argued for the Fairness Doctrine, one wonders if they would disagree with the comparison.
A fuller version of May’s argument was published by the Free State Foundation here. Worth reading.
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