Two notes on Network Neutrality

[David Farber <dave () farber net>]

A note from Lauren and a note from Faulhaber (a co-author of a memo  
with me and others)

Begin forwarded message:

From: Lauren Weinstein <lauren () vortex com>
Date: October 30, 2006 11:29:03 PM EST
To: dave () farber net
Cc: lauren () vortex com
Subject: Why consumers should care about Network Neutrality


Dave,

In a recent New York Times op-ed, former FCC Chairman Kennard
characterized the network neutrality debate as simply a battle
between the extremely wealthy and the merely rich, and suggested
that it was distracting us from what he considers to be the
truly important telecom-related issues.

No matter where one stands on network neutrality questions, Kennard
is missing the point -- the outcome of this controversy will affect
every consumer who ever comes into contact with the Internet in any
manner.

The interests of ordinary consumers and small businesses all too
often are left in the lurch regarding important issues.

That's what's happening now in the continuing arguments over network
neutrality on the Internet, where anti-neutrality forces --
primarily the large telephone companies and other increasingly
conglomerated telecom giants -- are attempting to manipulate the
debate to their own advantage, and to the detriment of nearly
everyone else.

Starting from their Defense Department research days, the Internet
and its ancestors have thrived on providing essentially neutral
channels of communications, with the networks themselves not
imposing skewed restraints on the actual applications using its
facilities, be they e-mail, file transfers, Web browsing, or newer
innovations such as audio/video streaming, and many others.

As the Net has become ever more integral to our daily lives, we've
come to depend on straightforward access to these services via the
many firms of all sizes that currently provide them.

But to the telcos and their ilk, neutral transmission isn't a big
enough profit center.  They want a cut of everybody's action, as
exemplified when AT&T's CEO Edward Whitacre made his infamous swipe
at Google and other major Internet services, claiming that they were
using "his pipes" for free.

This is utter fallacy and the anti-neutrality folks know it.  We're
all already paying for our Internet access.  Google pays for their
connections -- undoubtedly not small change either.  Every small
business, every family with an Internet DSL or Internet cable hookup
-- we all of us are already feeding money into the telecom company
coffers.  Even if we choose to use VoIP phone services, we're still
paying the phone or cable company for the underlying Internet
circuits.

The technical term for most of the anti-neutrality argument is
simply greed.  The telecom providers have watched business models
shift around them, and now, true to their roots, are looking for
ways to strangle the competition, no matter how skillfully their PR
machinery attempts to obscure this fundamental truth.

And if that sounds too strong, let's keep in mind that the telecom
landscape is littered with the broken promises and unfair tactics of
the dominant telephone companies in particular -- promised broadband
rollouts never delivered, "cherry-picking" of advanced services only
to the most lucrative neighborhoods, rates gone wild as soon as
regulatory scrutiny is lifted, and so on.

These guys are virtually the textbook definition of predatory
practices.  No wonder that it's so difficult to believe them now,
and why so many observers feel that laws mandating neutrality --
today, before neutrality slips away -- are the only practical
approach to maintaining Internet fairness.

Anti-network neutrality forces have suggested that since a large and
powerful firm like Google has taken a strong pro-neutrality stance,
that somehow this invalidates pro-neutrality arguments.  To be sure,
Google has a financial interest in the outcome, but so do the rest of
us as well.

In the sort of non-neutral Internet world of which the telecom
providers dream, it's questionable that Google, Vonage, eBay, or many
other household Internet names could even have afforded to really
get started in the first place.  A non-neutral Net would likely be a
death knell for a whole future of competitive Internet entrepreneurs
who might otherwise have brought us a vast range of useful new
services.  It's very much start-up and other small to medium-sized
businesses that are most at risk if a non-neutral Internet regime
takes hold.

Ironically, neutrality is one of those aspects of the Net that is so
taken for granted that it seems invisible and intrinsic.  But the
everyone pay-through-the-nose environment that would be the logical,
ultimate outcome of anti-neutrality wins would make very clear how
drastically such invisible attributes have been critical to the
Internet's success to date.

It's unfortunate that the network neutrality controversy has
escalated to an emotional level, which indeed can sometimes obscure
the underlying facts.  But the reality is that this is truly
important stuff, and most Internet users don't realize how
drastically and negatively they could be affected if anti-neutrality
arguments hold sway.

Getting true network neutrality back after it's been lost is likely
to be effectively impossible.  Except for the anti-neutrality cadre
themselves, we'd all be worse off with a non-neutral Internet.

--Lauren--
Lauren Weinstein
lauren () vortex com or lauren () pfir org


abd

From: "Faulhaber, Gerald" <faulhabe () wharton upenn edu>
Date: October 31, 2006 5:45:39 PM EST
To: David Farber <dave () farber net>
Subject: RE: Lauren Weinstein's Blog Update: Why Consumers Should  
Care About Network Neutrality

I simply don't know where to start on this one.  It's like he has never
read any of the serious criticism of network neutrality by, among
others, our Op Ed piece, the Atkinson-Weiser piece, or the Yoo piece.
He never takes those arguments on at all, but simply repeats the net
neutrality mantra that the Bells/cable guys can't be trusted (well,
duh!) and as a result we'll all be screwed royally.  All this without a
shred of evidence that this will actually happen, and not even a simple
nod to the fact that in over 5 years of BB ISPs, anticompetitive actions
by them almost never occur.  Madison River is the iconic case, but
that's the only one (plus a Canadian case).  If we are to believe they
are gonna screw us royally because they are nasty and have the wrong
incentives...well, they are nasty today and must have the wrong
incentives, so why aren't we being screwed today?  Before we enact a
bunch of new regulations (as always, in the name of increased
competition), show me the blood on the floor.

The thing that bothers me about this rant is that it simply doesn't
bother to address the serious concerns on the other side of the debate.
That's why it's a rant, and not a serious argument.


Professor Gerald Faulhaber
Business and Public Policy Dept.
Wharton School, University of Pennsylvania
Philadelphia, PA 19104
Professor of Law
University of Pennsylvania

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