more on Coalition Asks FCC to Ensure End-to-End

[Dave Farber <dave () farber net>]

------ Forwarded Message
From: Bob Frankston <rmfxixB () bobf Frankston com>
Date: Sat, 14 Dec 2002 09:54:50 -0500
To: dave () farber net, "'ip'" <ip () v2 listbox com>


Perhaps I have a tendency to jump to solutions but it is important to
ensure neutrality by aligning incentives. If the service providers had
no other business than selling capacity then the incentive is to do it
by whatever means are available and doing it very economically. For
example, one can increase DSL capacity and distance before putting in
new fiber.

One company cannot own both the service business and the transport
business -- at least until there is effective competition. If there is
an advantage to owning both that in itself is a reason not to and if
there isn't an advantage that is a reason not to. So separating them is
the only option.

The reason it is necessary to be explicit is that there is a tradition
of creating additional regulations to fix previous problems which only
creates new unintended consequences to be remedied.

With incentives aligned it is not only possible but necessary to remove
nearly all of the current regulations and thus achieve a much higher
degree of transparency.

The mention of Disney is a reminder that there is also the issue of
ownership of the bits. In this case I side with them -- they should own
the bits until the bits reach the buyer. ATT's ability to demand and get
a percentage of AOL transaction revenue is something that would have
been illegal in the days when we had a regulated monopoly. It is
disappointing to see the FTC stand on the sidelines now that we have
unregulated monopolies. This is a far simpler case than the one against
Microsoft.

Why does legacy telecommunications industry get to keep their exemption
from anti-trust now that there is no longer any excuse for it? We
shouldn't have to ask for a remedy given that the violations of
anti-trust (and free speech) are so blatant.

The good news is that the need for change is becoming too obvious to
ignore. What we need to focus on is the mechanism and the awareness of
the concept of connectivity -- the simple commodity out of which it
really is trivial to create the current telecommunications services and
it is possible to do far more.

The companies themselves already have a separation of the facilities
(wire) operations from the business/service side -- there really are two
distinct businesses. All we ask is recognition of the inherent conflict
of interest and that it is not only unnecessary but dysfunctional and
that we cannot afford it anymore.

Bob Frankston
http://www.Frankston.com

-----Original Message-----
From: owner-ip () v2 listbox com [mailto:owner-ip () v2 listbox com] On Behalf
Of Dave Farber
Sent: Saturday, December 14, 2002 07:31
To: ip


Lawrence Lessig: A threat to innovation on the web

By Lawrence Lessig
December 12 2002
Updated: December 13 2002

In a report issued last week, LeggMason, the financial
adviser, highlighted an important policy issue emerging in
the United States. It concerns one of only two great
internet policy proposals floating about in Washington just
now (the other has to do with spectrum), and is an idea that
the rest of the world could benefit from as well.

The proposal is to get regulators to help preserve the
neutrality of the internet. Last month, led by Vermont's
Public Services Board, the National Association of
Regulatory Utility Commissioners unanimously endorsed a
proposal calling on the Federal Communications Commission to
ensure that access to the internet remain neutral, meaning
that access providers be prevented from exercising control
over how consumers use the network. A few days later, a
strange coalition of companies and consumer activists,
including Disney, Microsoft, and the Media Access Project,
sent a letter to the chairman and members of the FCC, asking
the government to ensure the "ability of consumers and
business to communicate with one another ... without
obstruction from network service providers." Both steps
signal, LeggMason reported, a "key policy issue" that will
increasingly frame the telecommunications debate: "the
extent to which the network provider can restrict the
customers' use of the network."

The question here is an old one, but it is important that a
broad range of commercial and non-commercial actors now
agree upon it. The internet was born a "neutral network",
but there are pressures that now threaten that neutrality.
As network architects have been arguing since the early
1980s, its essential genius was a design that disables
central control. "Intelligence" in this network is all
vested at the "end" or "edge" of the internet. The protocols
that enable the internet itself are as simple as possible;
innovation and creativity come from complexity added at the
ends.

This "end-to-end" design made possible an extraordinary
range of innovation. When Tim Berners-Lee started to sell
the idea of a "World Wide Web", he did not need to seek the
approval of network owners to allow the protocols that built
the internet to run. Likewise, when eBay launched its
auction service, or Amazon its bookselling service, neither
needed the permission of the telephone companies before
those services could take off. Because the internet was
"end-to-end", innovators and users were free to offer new
content, new applications or even new protocols for
communication without any permission from the network. So
long as these new applications obeyed simple internet
protocols ("TCP/IP"), the internet was open to their ideas.
The network did not pick and choose the applications or
content it would support; it was neutral, leaving that
choice to the users.

This ideal of neutrality predates the internet. It would be
a strange and bad thing if the electricity grid
discriminated against Sony television sets by serving
reliable electricity only to Panasonic TVs. Likewise, it is
desirable that the roads are not built to favour Ford trucks
over BMWs, but are instead designed to favour none, equally.
In both cases, policymakers have long understood the
importance of platform neutrality. In both cases, neutral
platforms enable the broadest scope for innovation and
growth.

But increasingly, the providers of internet connectivity are
pushing a different principle. US broadband companies are
trying to ensure that they have the power to decide which
applications and content can run. Under such a regime, if
Microsoft wants to sell Xboxes to run on the broadband
network then it will have to pay the network providers for
that privilege. Or if Disney wants to stream movies on the
internet, it too will have to pay the network tax.

Now Disney, and Microsoft are big companies, you might
think. What's wrong with taxing the rich? But the argument
of this emerging coalition is that neutrality on the
network  helps innovation generally. An internet where
innovation required the permission of the network owner
would be much less creative. The growth and potential of the
network comes from leaving it open to grow as consumers and
innovators choose.

This neutrality will not come naturally. The tendency of
network providers will always be, as it has been so far,
towards control. But it is an important and promising
development that so broad an alliance of companies could
join consumer activists to push the government to preserve
the most crucial aspect of the internet's original
environment.

It might seem strange that this lesson in preserving the
original values of the internet should come from Microsoft
and Disney - two companies that have suffered a great deal
of criticism from network activists. But on this issue both
deserve praise. Policymakers must see that what makes
innovation possible on the internet is the freedom to
innovate without the permission of a network owner.

Lawrence Lessig is a professor of law at Stanford Law School
and author of The Future of Ideas: The Fate of the Commons
in a Connected World

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