An extremely smart blogger at Without Bound points out another problem with Bill Herman’s critique of Ed Felten’s paper:
Yes, as Herman says, the issue is currently in the public eye. But why? A few ill-advised comments from a telecom CEO and a bunch of wild speculation and exaggeration. It doesn’t appear that there have actually been any serious violations of network neutrality yet. (One dinky ISP in North Carolina blocked rival VoIP services, but the FCC stopped that with current regulations.)
So if the issue is this hot based only on a theoretical threat, I can only imagine that if ISPs actually started violating network neutrality principles, the grass roots would be even more outraged. There would be plenty of political will to enact regulations at that point, if necessary.
This is especially true because (as Jim Gattuso has documented) the pro-regulatory coalition is hardly getting by on a shoestring budget. AT&T, Verizon, Comcast, and company are currently swearing up and down that they won’t discriminate against Internet content or services. If they break their word, I bet Microsoft and Google would be happy to pony up a few million dollars for a nationwide media campaign highlighting their hypocrisy.
And remember the public outcry over the FCC’s minor tweaks to media ownership rules? It’s just not that difficult to generate a populist backlash against the abuses of media companies.
On a related note, Bill Herman incorrectly stated that EFF is on the network neutrality bandwagon. I wanted to point out this fantastic post by EFF Chairman Brad Templeton on why his organization is sitting this one out:
If you’ve followed closely, you’ve seen very different opinions from EFF board members. Dave Farber has been one of the biggest (non-business) opponents of the laws. Larry Lessig has been a major supporter. Both smart men with a good understanding of the issues.
I haven’t supported the laws personally because I’m very wary of encoding rules of internet operation into law. Just about every other time we’ve seen this attempted, it’s ended badly. And that’s even without considering the telephone companies’ tremendous experience and success in lobbying and manipulation of the law. They’re much, much better at it than any of the other players involved, and their track record is to win. Not every time, but most of it. Remember the past neutrality rules that forced them to resell their copper to CLECs so their could be competition in the DSL space? That ended well, didn’t it?
Even without the telco lobbying wizards to be afraid of, none of the draft proposals I have seen have made a lot of sense to me. In general, they have ranged from being quite constraining on the net to being trivial to bypass for a determined telco or cable company. It’s hard enough to find something with the right balance, let alone keep it right through the political process.
Templeton says a lot of other smart things, so I urge you to go read his whole post.
Bill Herman has a response to Ed Felten’s paper over on the Public Knowledge blog. It’s a long and thoughtful response, so I thought it would be worth quoting in detail before I respectfully disagree with his conclusion:
In the U.S. political system, most policy topics at most times will be of interest to a small number of policymakers, such as those on a relevant congressional committee (Jones & Baumgartner, 2005, p. 39). House and Senate committees specialize, develop most of the language of topical bills, and oversee the implementation by the relevant administrative agencies–which are even more specialized. Interest groups who care about niche issues can therefore easily locate and lobby the policymakers who most control their fate, providing electoral support (including campaign donations) to helpful committee members. Constituent groups also lobby on behalf of helpful (and against disagreeable) agencies. In most cases, the rest of the legislative and executive branches will pay little attention to this cozy relationship, and a hardened three-way bond of mutual indebtedness will grow over time. This is called an “iron triangle.” (Follow the link for a very useful illustration.) Well-financed interests consistently succeed in currying favors from the other two members of the iron triangle, and poorly financed public interests generally fail.
So far so good…
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Art Brodsky complains about the broadband duopoly:
We’ve argued that broadband is a duopoly, with Federal Communications Commission (FCC) statistics showing that just about everyone who has broadband gets it from either the telephone company or the cable company. The FCC has affirmatively pursued the policy of creating this situation, and it’s one of the main reasons we need a Net Neutrality policy. There is no real choice.
The new Kagan study shows just how un-competitive the broadband market is. Here’s the title of the study: “Cable Modem Vs. DSL: Rivals Side-Step Big Price Wars So Far.”
Not only are there only two “choices,” in supplier, there’s little evidence of competition on one factor that really counts–price. In their July 6 Insights email newsletter, Kagan puts it fairly simply: “Though the battle for broadband access subscribers is intense, there’s no screaming price war between cable TV and telcos, and Kagan Research doesn’t expect one in the foreseeable future.” You can read the report here.
There are several things to say about this. First, this doesn’t match my experience. I signed up for a cable modem a year ago at an introductory rate of $26.99/month for six months. After that rate expired, I called my cable provider and threatened to switch to AT&T (who was offering a $14.99/month introductory rate), and they offered me a rate of $29.99/month with a 1-year contract. So not only am I paying significantly less than the Kagan article shows, but I’ve also experienced direct price competition for my business.
Maybe St. Louis is just a more competitive market than most. But it’s also possible that the competitors have kept their official prices steady while offering more discounts, rebates, and special deals. The Kagan article doesn’t have a lot of detail about its methodoloy, so it’s hard to be sure.
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Ed Felten has a great new paper out on network neutrality regulations. Here’s his policy conclusion:
The network neutrality issue is more complex and subtle than most of the advocates on either side would have you believe. Net neutrality advocates are right to worry that ISPs can discriminate–and have the means and motive to do so–in ways that might be difficult to stop. Opponents are right to say that enforcing neutrality rules may be difficult and error-prone. Both sides are right to say that making the wrong decision can lead to unintended side-effects and hamper the Internet’s development.
There is a good policy argument in favor of doing nothing and letting the situation develop further. The present situation, with the network neutrality issue on the table in Washington but no rules yet adopted, is in many ways ideal. ISPs, knowing that discriminating now would make regulation seem more necessary, are on their best behavior; and with no rules yet adopted we don’t have to face the difficult issues of linedrawing and enforcement. Enacting strong regulation now would risk side-effects, and passing toothless regulation now would remove the threat of regulation. If it is possible to maintain the threat of regulation while leaving the issue unresolved, time will teach us more about what regulation, if any, is needed.
And here’s one other thought that struck me while reading the paper:
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As Congress draws closer to passing significant telecommunications reforms, it’s clear that a larger issue serves as a backdrop to the hot topics of net neutrality, cable franchise reform, and municipal WiFi. That is, will the Internet be treated like telecommunications, or the other way around?
New technologies have caused a convergence in the communications sector so that the phone company can also be the cable company and vice versa. Indeed, an Internet company can also provide cable and phone services. EBay bought Skype, an Internet phone company that offers free calling, Microsoft is moving into the IPTV space, and Google offers voice services integrated with features like instant messaging.
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Reading Jim Gattuso’s post about Google and network neutrality, it occurred to me that Eric Schmidt’s argument here only makes sense if we assume that the broadband companies are run by morons:
Today the Internet is an information highway where anybody–no matter how large or small, how traditional or unconventional–has equal access. But the phone and cable monopolies, who control almost all Internet access, want the power to choose who gets access to high-speed lanes and whose content gets seen first and fastest. They want to build a two-tiered system and block the on-ramps for those who can’t pay.
I think it’s safe to say that Verizon, Comcast, et al want to make as much money as possible. So her’s my question: If you were a telco executive trying to maximize revenue from your shiny new fiber network, how would you set your prices?
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Could Google execs go to jail for bit discrimination? Theoretically, yes, according to a proposal by Sen. Jim DeMint (R-SC). Submitted as an amendment to the telecom bill now being marked up by the Senate Commerce Commitee, DeMint’s proposal would make it unlawful to “prioritize or give preferential or discriminatory treatment in the methodology used to determine Internet-search results based on an advertising or other commercial agreement with a third party.” Any person found in violation would face a maximum fine of $5 million or imprisonment for up to one year.
The plan seems targeted at Google’s sponsored links system, under which users get prominently placed, paid for, links with their search results. (The paid content is separate from the non-paid results, which are not influenced by payments).
For the record, this is a terrible idea. And, I’m willing to bet that Sen. DeMint thinks so too. Instead, the amendment seems intended to underscore Google’s uncomfortable position in the net neutrality debate. While the company has spearheaded the call for net neutrality for telephone and cable firms, its own practices–and power–mirrors that of those companies.
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Jim Lippard reports on another alleged case of an ISP engaging in network discrimination. Apparently, for the last few months Craigslist has been loading unbearably slowly for certain Cox cable customers. Pro-regulatory types jumped on it as evidence that new regulations were needed. The story ricocheted quickly around the blogosphere, and even ended up on the pages of the Wall Street Journal.
But Lippard tells us the rest of the story:
In fact, we know now that it’s a combination of a bug in a firewall driver produced by Authentium software and unusual (but not incorrect) behavior by the Craigslist webserver setting the initial TCP window size to 0. The facts of the problem came out (at least between Craigslist, Cox, and Authentium) at the time the problem was first reported, was fixed in a beta release within weeks, and has only affected Cox customers who use Authentium’s security suite…
This issue was a user software application issue that had no more to do with network neutrality than a browser incompatibility issue, a webserver disk failure, or a fiber cut. Each of these things can prevent a user from reaching some specific content, but none is imposed by the network provider or remedied by act of Congress or the FCC. Those who continue to treat it otherwise even after knowing the details are demonstrating questionable judgment and integrity.
It’s funny how all the examples of purporting to demonstrate the need for more regulation fall apart upon closer inspection.
The Technology Liberation Front is the tech policy blog dedicated to keeping politicians' hands off the 'net and everything else related to technology.