Does Network Neutrality Make Economic Sense?

from the yes,-but-that-doesn't-mean-you-mandate-it dept

A bunch of folks have submitted this story highlighting a study by a think tank noting that network neutrality makes economic sense. There's nothing surprising in the report -- if anything it seems like direct common sense. Basically, with a neutral net, you have the great competition and economic development happening on top of the platform. Without it, you get an effective fund transfer from the competitive layers (content and apps) to the least competitive layers (network infrastructure). The end result is a less economically efficient market, and a situation worse for everyone but the infrastructure companies -- who already get tremendous benefits from gov't-granted rights of way and subsidies. Pretty straightforward. That said, this doesn't necessarily mean that we should regulate net neutrality. This is really not all that different than Tim Lee's excellent Cato analysis from over a year ago -- which also notes the likelihood of dangerous unintended consequences from mandating net neutrality. Again, the real issue is the lack of real competition in the market. Since it seems pretty clear that the market of users won't stand for a non-neutral network in most cases, if they have a choice, the real way to ensure a neutral net and economic efficiency is to increase true competition.

Filed Under: economics, efficiency, net neutrality

Court Notices That The FCC Appears To Have No Legal Mandate To Enforce Net Neutrality

from the good-for-them dept

With the FCC trying to use its legal fight with Comcast to push for net neutrality, an appeals court has pointed out that the FCC doesn't have any legal basis for policing net neutrality. This is a point that we've made in the past, when we found it odd that the same groups that fought like dogs to have a court say that the FCC had no mandate to enforce a "broadcast flag" were the same groups that suddenly thought the FCC had a mandate over net neutrality.

The truth -- as courts have recognized in both cases -- is that both appear to be situations where the FCC is overreaching its authority.

Still, it's not just the groups supporting the FCC on net neutrality that are taking inconsistent positions here. Remember how Comcast -- which this latest ruling supports -- has in the past used the argument that the FCC does have this mandate over them to try to avoid regulatory oversight in California. So neither side looks very good here. In fact, in a recent interview concerning the proposed Comcast/NBC merger, Comcast's spokesperson highlighted that people shouldn't be afraid of NBC getting preferential treatment because "existing law already prohibits any discrimination." What existing law? Uh, the same one Comcast just convinced the court doesn't exist. In other words, the law doesn't exist when Comcast doesn't like it, but if anyone says Comcast might violate neutrality, it insists the law suddenly does exist.

On the whole, it's a good thing that the court is making sure the FCC doesn't overstep its authority here -- though, there's a pretty good chance that the response is going to be a push in Congress to give the FCC this authority. And that's where things get sticky. Should the FCC have the right to regulate the internet? While the concept of net neutrality is important and it would be bad for it to go away, that's quite different than opening up the pandora's box of giving the FCC the right to enforce it. The risk of unintended (and dangerous) consequences is quite high.

Instead, the real focus should be on increasing competition in the broadband space so that users have a real choice and can ditch any provider who decides to ignore the principles behind net neutrality. Until that happens then we're going continue to have these battles over the symptoms of not enough competition.

Filed Under: fcc, mandates, net neutrality
Companies: comcast, fcc

Russian ISP Blocking Political Opposition Websites

from the this-is-the-concern dept

I am still not convinced that we need special laws mandating net neutrality, but I find the arguments from telcos that no one would ever block sites or services to be highly unbelievable. There have been cases of it happening in the past, and there are cases of it happening now. Shocklee points us to the news that a Russian ISP has been blocking websites that the government has dubbed "extremist," even though they include political opposition sites like Garry Kasparov’s Kasparov.ru, Solidarity's Rusolidarnost.ru and the National Bolshevik Party's Nazbol.ru. Combine that with attempts in the UK and Australia to give the government the ability to make up secret lists of sites that should be blocked by ISPs, and you can see why some believe it's important, as a fundamental principle, that ISPs should allow access to any site. US telcos say that they are in the business of encouraging free speech, and they would be crazy to block sites, but what we're seeing around the world suggests that there are times when ISPs do decide to block sites, and it's often due to political pressure from governing parties.

Filed Under: blocking, censorship, net neutrality, politics, russia, websites

Songwriters Guild: Network Neutrality Means More Piracy

from the oh-really-now? dept

There has been an effort made by some to try to connect the totally unrelated issues of network neutrality and unauthorized file sharing together. There is no connection between the two, but that won't stop busy lobbyists from doing their best to drum up such a connection. Copycense points us to the news that Grover Nordquit's group has decided to push this line of nonsense by parroting claims by the Songwriter's Guild of America (SGA) that accepting net neutrality is akin to encouraging piracy. How? That's not clear, because there's really no connection at all. The best they can say is that net neutrality would prevent efforts to crack down on file sharing (except, every plan for net neutrality has explicitly had exceptions for such things). I've said it before and I'll say it again: I am not in favor of laws mandating neutrality, but the arguments made by those against it are so over-the-top ridiculous that it's actually making me wonder why. There are reasonable arguments against mandating neutrality, but these groups don't make them.

That it's the SGA making these arguments initially shouldn't come as a surprise. The group has a rather antiquated view of business models and modern technology, and its boss has declared in the past that songwriting would not occur without copyright -- an obviously incorrect statement. The SGA has become a caricature of itself in the last few years. Rather than admitting that the market is changing and working with songwriters to help them adapt, it has basically decided the only reasonable strategy is to go crying to the government for more protectionism, and greater mandatory licensing fees. This is an odd group for the anti-net neutrality types to team up with, since most of them claim their reasons for being against net neutrality is to get away from government meddling in the internet industry. And then they go and team up with the SGA, who's entire purpose is to encourage more government meddling in the music business? Politics makes strange bedfellows indeed...

Separately, it's probably worth noting that ITIF, a "think tank" in DC and which has been a huge anti-net neutrality voice, has just come out with a poorly researched, poorly argued, joke of a report on "reducing digital piracy." In it, they promote kicking people off the internet (based on accusations, not convictions) under a three strikes regime, and also that ISPs should filter and monitor their networks to try to stop infringement. Apparently, ITIF is not a big fan of your privacy... but it's own... well, just try to find out who funds ITIF? That's secret. Funny how that works. Otherwise the report repeats a bunch of sweeping claims that have no support in reality, and does not back them up. It states, repeatedly, that you can't compete with free, even as many smart businesses do that every day. The report advocates DRM, and amusingly fails to mention the massive failure of every DRM system to date, and the harm it has done to legitimate users. But, of course, it saves most of its focus on supporting "technical measures" from ISPs to inspect your content and stop you if they think you're doing anything wrong. Welcome to the big brother state. The report also supports ACTA, even though it admits it doesn't know what's included. Basically, it's "recommendations" straight from the entertainment industry, with no basis in reality. And, with a nice "net neutrality" tie-in. Those ties seem likely to get closer, which is unfortunate. Funny that those who keep claiming they want the government to "stay out" of the internet, are so keen to have them very actively involved when it comes to copyright.

Filed Under: digital content, grover nordquist, net neutrality, piracy, songwriters
Companies: itif, sga

Cable Lobbyist Says Net Neutrality Violates The First Amendment

from the how? dept

Before we get into the details here, I should state, as a reminder, that I'm not in favor of passing laws mandating net neutrality, as I believe that there is a very strong potential for negative unintended consequences. Yet, I do think that the principle of network neutrality is important, and that it would be a serious mistake for ISPs to look to erode it. Basically, the issue is a lot more nuanced than it is often made out to be. But one thing that is quite clear is that some of the claims on all sides of the debate have gone to ridiculous levels. You may recall, for example, the flat out lie by lobbyist Mike McCurry, saying that Google paid nothing for bandwidth and its push for net neutrality was to keep getting bandwidth for free. That's a complete lie.

And now, a whole bunch of you have sent in the story about how a top cable industry lobbyist, Kyle McSlarrow, of the NCTA, is claiming that any net neutrality mandate would violate ISP's First Amendment rights. What he doesn't explain is how. And that's because he can't. He stacks a few different concepts on top of one another to argue that net neutrality could prevent cable companies from "delivering their traditional multichannel video programming services or new services that are separate and distinct from their Internet access service." Except, there's nothing in the suggested FCC mandates that would do that. And even if it did, it's still difficult to see how it would be a First Amendment violation.

There are tons of very good reasons why we might want to avoid mandating net neutrality through law. But arguing that it will be a First Amendment violation isn't one of them... and it makes me wonder why lobbyists fighting against the regulations keep bringing up such bad arguments.

Filed Under: cable companies, first amendment, net neutrality
Companies: ncta

A Look Back: NBC's Words Against AOL/Time Warner Merger May Come Back To Haunt

from the ooops dept

NBC Universal is probably wishing that people didn't remember stuff from a few years ago right now. The folks over at the National Journal dug up NBC Univeral's vehement opposition to the AOL/Time Warner merger, which used all sorts of arguments that I would imagine NBC Universal would prefer were not used against its pending merger with Comcast. The letter, sent to the FCC in July of 2000 included this point:

"Given the size and scope of the proposed merged company, AOL/Time Warner will have both the ability and the incentive to discriminate against unaffiliated content providers such as NBC."

Furthermore, NBC Universal was quite worried about how that deal would impact net neutrality and asked the FCC to make clear net neutrality principles if it allowed the merger to move forward, asking the FCC:

"to establish firm principles of non-discrimination in the treatment of unaffiliated content providers in the broadband services marketplace"

Of course, Comcast is now very much against that concept.

Not surprisingly, the letter was signed by NBC Universal's General Counsel, Rick Cotton, who has a long history of sticking his foot in his mouth in saying things he later regrets -- such as his still hilarious quote about how corn farmers were being harmed by movie piracy, and who was a major source for the bogus Hollywood propaganda piece on 60 Minutes. Still, you have to imagine that he now regrets that letter -- and the fact that reporters have now brought it back to light.

Filed Under: mergers, net neutrality, rick cotton
Companies: aol, comcast, nbc universal, time warner

RIAA: We Support Net Neutrality, Just As Long As It Includes The Ability For ISPs To Block File Sharing

from the so-that's-how-it-works? dept

Because I know how much you've all been wanting to know what a bunch of dying record labels and their chief lobbyist thinks about net neutrality, the RIAA's president Cary Sherman put out a statement saying that they're happy with the new rules because the FCC's Julius Genachowski has said it's okay for ISPs to ignore all those rules as long as they're going after "illegal conduct" online -- which of course the RIAA assumes must mean file sharing.

Filed Under: net neutrality
Companies: riaa

Retired Telco PR Exec Who Sent XYZ Corp. Letter To FCC Insists He Wrote It

from the uh-huh... dept

We've already written about how a former PR exec from what became AT&T has been outed as the guy who sent a letter to the FCC where he forgot to take out the boilerplate XYZ Organization that was almost certainly left there by the AT&T lobbyists who wrote the letter for him. However, one of our commenters noted that MediaPost spoke to the guy, Bob Sells, who insists that he wrote the letter with the XYZ part included:

Sells, a 77-year-old retired public relations executive in Little Rock, tells MediaPost that he often writes letters with placeholders and fills in the correct text later, but overlooked the reference to XYZ in this case.

Really? I'm really trying to give this guy the benefit of the doubt, but I can't come up with a single explanation for why he would write "XYZ Organization" when writing a letter himself from a group of people he supposedly represents. If you're the one writing the letter, on behalf of your supposed organization, why would you include "XYZ Organization"?

Filed Under: astroturfing, bob sells, cut and paste, lobbying, net neutrality
Companies: at&t

Guy Who Signed 'XYZ Corp.' Astroturf Letter... Worked As Telco PR Person For Nearly 3 Decades?

from the funny-how-that-works... dept

So, remember last week when we wrote about how anti-net neutrality lobbyists from AT&T had crafted astroturf letters for various "special interest groups" to sign -- but someone forgot to remove the boilerplate "XYZ Organization" in the first paragraph? We also noted that there was little evidence that the group -- the Arkansas Retired Seniors -- actually existed. However, Matt Cutts did a bit of digging and found that the name of the guy who signed the letter -- Bob Sells -- appears to have worked in PR for Southwestern Bell for 28 years (there appears to be only one Bob Sells or Robert Sells in Little Rock). Southwestern Bell, of course, became better known as SBC. SBC, of course, became AT&T after it bought the old AT&T and took on its name. So, if you're an AT&T lobbyist and you want to convince the FCC that "seniors" are against net neutrality -- and you don't want it to appear to come from AT&T employees -- who better to go to than an ex-employee? Still, next time you get a former employee to shill for you, remember to replace the bogus XYZ Organization you left for him in the text of the letter you sent him.

Filed Under: astroturfing, bob sells, cut and paste, lobbying, net neutrality
Companies: at&t, sbc, southwestern bell

AT&T Asks Employees To Hide AT&T Affiliation While Protesting Net Neutrality Laws

from the disclosure? dept

We've been having some discussions lately about the FTC's new guidelines for "disclosure," and some of our regular critics have been gleefully insisting that the reason I don't like those rules is because I don't disclose stuff, and I'm scared the FTC is going to crack down on the site. I find this pretty funny, because I am a huge believer in the importance of disclosing stuff, and on the rare occasion we've been in a situation where disclosure was necessary, we have no problem disclosing, even to the point that it's almost silly. Almost nothing in those rules impacts us directly. My real complaint with the rules is that the FTC rules aren't needed and raise serious First Amendment issues. First, most blogs and other social media efforts are conversational, not publishing, and a whole different set of social cues matter there. Second, anyone stupid enough not to disclose their affiliations on certain things is going to face pretty serious backlash when it comes out (as it certainly will).

Take, for example, the backlash today on the news that AT&T's chief lobbyist sent out an email to all AT&T employees urging them to protest any new net neutrality laws and hide their AT&T affiliation as they do so. AT&T has confirmed the email, which has numerous factual errors (and remember, I actually agree that net neutrality laws don't make sense). But, more importantly, the mainstream media is now calling AT&T out for this outrageous effort to have employees pretend they're not employees in protesting these rules.

Transparency on conflicts makes a lot of sense. It's something that people should do because it makes you more trustworthy -- not because the FTC threatens to fine you. The problem with the FTC rules is that it creates a weird chilling effect and threat of action on things where the rules aren't at all clear. As AT&T is learning today, trying to hide that kind of thing just creates a lot of backlash. It makes AT&T appear like it doesn't have a strong legitimate case, and needs to resort to underhanded techniques to make its argument.

Oh, and to make the FTC and our critics happy: Full Disclosure: I use AT&T DSL at home, and while I pay for it, a few years back there was a long outage, and AT&T agreed to give me a credit of $35 off my next bill. I also know some people who work at AT&T. My wife uses an iPhone, which I assume must run on AT&T's network, but it's provided by her employer (oh, crap, do I need to disclose who that is too?), and so we never see the bill -- so maybe the FTC thinks it's provided for free? I once sat on a panel with a representative from AT&T, and while I disagreed with him on most things policy-wise, I thought he was a nice guy, and at times I've talked to him about why AT&T should be more involved in online conversations (like this one!). Anything else?

Filed Under: disclosure, net neutrality, transparency
Companies: at&t