more on Give Me Bandwidth . . .

[David Farber <dave () farber net>]

Begin forwarded message:

From: "Faulhaber, Gerald" <faulhabe () wharton upenn edu>
Date: June 21, 2006 11:49:15 AM EDT
To: David Farber <dave () farber net>, Michael Katz  
<katz () haas berkeley edu>, Christopher Yoo  
<christopher.yoo () Law Vanderbilt Edu>
Subject: RE: [IP] Give Me Bandwidth . . .

I think Sara Lai has it right on several counts.  Yes, NN is a  
misplaced debate about market power in last mile  
distribution...again.  Yes, antitrust is a good answer, but recent  
court rulings have jeopardized the ability of private parties and  
agencies to bring antitrust suits in this industry.  I believe we are  
of the view that AT is the way to go, but perhaps some Congressional  
clarification of AT's role in telecoms/Internet space is no bad thing.

This article is one of the most sensible I've seen in some time on  
this issue.

Comments?


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

-----Original Message-----
From: David Farber [mailto:dave () farber net]
Sent: Wednesday, June 21, 2006 9:03 AM
To: Faulhaber, Gerald; Michael Katz; Christopher Yoo; David Farber
Subject: Fwd: [IP] Give Me Bandwidth . . .



Begin forwarded message:

From: Sarah Lai Stirland <stirland () gmail com>
Date: June 20, 2006 11:29:38 PM EDT
To: dave () farber net
Subject: Re: [IP] Give Me Bandwidth . . .

Hi Dave,

I just wrote an issue paper on this subject of competition in this  
area. Everyone agrees that antitrust should play a big role in  
enforcing net neutrality. But antitrust practitioners say the law is  
broke ...

Issue Of The Week: Monday, June 19, 2006 The Resurrection Of AT&T by  
Sarah Lai Stirland

     Thirty-three years ago, the antitrust subcommittee of the  
Senate Judiciary Committee held a hearing about AT&T's performance,  
its communications monopoly and allegations of its anti-competitive  
behavior. The forum was one of the first public places where the idea  
of breaking up Ma Bell was first floated.
     This Thursday, the antitrust subcommittee will preside over a  
hearing where executives from the companies that used to comprise Ma  
Bell will discuss the competitive impact of reuniting, as AT&T  
prepares to acquire BellSouth. The merged firm would reinstate AT&T  
as the largest provider of communications services in the nation.
     The questions about the nature of competition in the  
telecommunications market and the fears that AT&T competitors have of  
the merged firm's ability to abuse its position remain the same at  
the dawn of the 21st century as they did in the 1973. Many of the  
arguments also remain unchanged. Only the vocabulary to describe them  
has changed.

New Terms, Familiar Debate
     One buzz phrase is "network neutrality." It means different  
things to different people, depending on where they stand along the  
chain of digital communications networks.
     Infrastructure providers have characterized it as a dangerously  
vague concept that would prohibit them from offering specialized --  
and sometimes faster -- Internet connections to unspecified kinds of  
customers willing to pay a premium.
     Internet companies such as Amazon.com, eBay and Google, along  
with Bell competitors, have said a mandate that similar types of  
Internet content be treated equally would roll back recent legal  
developments deregulating the communications industry. The rule, they  
assert, would prevent dominant Web providers companies from behaving  
anti-competitively by "discriminating" against their products and  
services.
     In Senate Judiciary Committee testimony last week, long-time  
telecommunications analyst Blair Levin noted the similarities between  
today's net neutrality debate and previous telecom discussions.
"Network neutrality presents an old policy problem -- whether, and if  
so, how, to regulate a network -- but with a new set of facts: an  
unregulated duopoly of the most important platform for economic  
growth in the country," wrote Levin, now a managing director at  
Stifel, Nicolaus and Co.
     "Net neutrality really is a proxy for something else," Jonathan  
Rubin, a senior fellow at the American Antitrust Institute, said in  
an interview. Rubin is scheduled to testify at the Thursday hearing  
about the AT&T and BellSouth merger.
     "The antitrust perspective is that the network neutrality  
proponents themselves recognize that the essential problem that net  
neutrality tries to address is the lack of competition in the  
broadband access market," Rubin said. "Because of that, this raises  
the question of what is the best solution to what is essentially a  
competition problem."
     Comcast Executive Vice President David Cohen told the  
subcommittee last week, "Antitrust laws are by far the best way to  
address any occurrence of the kinds of problems that network  
neutrality proponents say they are concerned about."

Confusion In The Courts?
     Yet several players in the world of antitrust and  
telecommunications note that recent court decisions have blunted  
antitrust enforcers' tools. House Judiciary Committee Chairman James  
Sensenbrenner, R-Wis., is among the critics.
     Sensenbrenner sponsored legislation to clarify congressional  
intent behind the existing body of antitrust law. But the House  
failed to include that language in the telecom bill it approved at  
the beginning of the month. Testifying before Senate Judiciary last  
week, Sensenbrenner said, "A record of considerable judicial  
confusion has developed in our nation's courts."
     Specifically, he cited a series of appellate and Supreme Court  
rulings. In 2000, the 7th U.S. Circuit Court of Appeals ruled in  
Goldwasser v. Ameritech that a group of consumers could not use  
antitrust law to sue Ameritech, a dominant telecom carrier, because  
the 1996 Telecommunications Act addresses the issues and pre-empted  
antitrust law.
     The Supreme Court in 2004 affirmed that line of thinking when  
it ruled against a complainant who had sued Verizon Communications  
(then Bell Atlantic). Curtis Trinko charged that Bell Atlantic had  
denied AT&T's customers non-discriminatory access to Bell Atlantic's  
network, in violation of both communications and antitrust law.
     "This is precisely the judicial analysis that Congress  
precluded in the 1996 act, and this holding has done violence to  
remedial antitrust enforcement and competitive gains in the  
telecommunications marketplace," Sensenbrenner told Senate Judiciary.
     His observations are shared by Bell competitors and a former  
Justice Department attorney who played a role in prosecuting the  
government's decades-long antitrust suit against the old AT&T.
     "The Trinko opinion is remarkably tendentious and unremittingly  
hostile to the application of the antitrust laws to regulated  
industries," Philip Verveer, a partner at the law firm of Willkie  
Farr and Gallagher, said during a House Judiciary subcommittee  
hearing in 2005. "The decision greatly overvalues the ability of  
regulatory agencies to adjudicate monopolization claims and  
undervalues that of antitrust prosecutors in courts."

<snip>
...

On 6/19/06, David Farber <dave () farber net> wrote:
> Begin forwarded message:
>
> From: "Robert J. Berger" <rberger () ibd com>
> Date: June 19, 2006 5:17:38 PM EDT
> To: David Farber <dave () farber net>
> Subject: Give Me Bandwidth . . .
>
> -------------------------------------
> You are subscribed as stirland () gmail com To manage your subscription,
> go to
>   http://v2.listbox.com/member/?listname=ip
>
> Archives at: http://www.interesting-people.org/archives/interesting-
> people/
>
>
> Give Me Bandwidth . . .
> No one to root for in the net neutrality debate.
> by Andy Kessler
> 06/26/2006, Volume 011, Issue 39
> http://www.weeklystandard.com/Utilities/printer_preview.asp?
> idArticle=12348&R=ECCBA034
>
> FINDING IT HARD TO UNDERSTAND the "net neutrality" debate? On one side
> are the hip, cool, billionaire web service companies like Google,
> eBay, Yahoo, and even Microsoft. Net neutrality is their rallying cry.
> Despite the fact that they are basically schlocky ad salesmen on a
> grand scale, they're pushing this quaint, self-serving '60s notion
> that the Internet is a town square--all for one and one for them, or
> something like that. Everyone should be allowed to hang out in the
> town square and use it as they please, one low price, eat all you want
> at the buffet.
>
> On the other side are the monopolist plumbers like Verizon and AT&T
> and Comcast. These are the folks who laid the pipe that delivers the
> Internet--the blogs and pirated movies and photos of Shiloh
> Brangelina--to your house or office. They think the Internet is more
> like a giant shopping mall, and they're the mall owners. You the
> customer can walk around as if you were in the town square, but the
> tenants (see billionaire web service companies above) are going to
> have to pay for the upkeep of the premises. If they're one of the
> anchor stores, they might pay a lot.
>
> In an effort to skim their own fees off the Google crowd, lobbyists
> and Congress have also taken up the fight. So far, the telcos are
> winning--a bid to add net neutrality language to a telecommunications
> bill was shot down 269-152 by the House on June 8--but this is one of
> those bizarre issues where both sides are off their rocker.
>
> If Congress doesn't act, does this mean Apple might pay 10 cents per
> iTunes download to Bellsouth? Will Google have to pay 5 percent of ad
> revenue to AT&T for speedy delivery of your search results? Will we
> pay $1 per video played in your browser to Comcast? Silly, right?
> Well, not so fast, and that's the problem.
>
> Telcos and cable companies have no choice but to lobby for legislation
> that bars neutrality. Because without the ability to extract money
> from the webbies for the use of their not-so-fast Alexander Graham
> Bell-era wires (forget that you and I already overpay for this), AT&T
> or Verizon might not have any business model going forward. With no
> real competition, they'd rather keep U.S.
> telecommunications in the Flintstone era and overcharge for calls to
> Grandma than upgrade their networks. Since 1998, telecommunications
> companies have outspent computer and Internet firms on politicians
> $231 million to $71 million, just to keep the status quo.
>
> Hate to break the news, but your "fast" DSL Internet access is no
> longer considered high speed. In parts of the world, cell phones are
> faster. Have you wondered why Internet video doesn't fill your
> computer monitor and look like a DVD, but instead is pixelated dreck
> in a tiny one or two inch square? Well, Comcast is dragging its heels,
> too. With better video over the Internet, who would want E!, let alone
> the Style Network? Because of this Fred and Wilma thinking, the United
> States is 16th in the world in broadband use (behind
> Liechtenstein!) with East Timor catching up fast. The French may burn
> Citroëns, but they get 10 megabits for 10 euros--50 times your "fast"
> Internet access for half the price. That's just not right.
>
> We'll never get 10 megabits to our homes, let alone the multiples of
> that speed that are possible and affordable today if these telco
> Goliaths keep covering up their crown jewels. As Dean Wormer might put
> it: Fat, drunk (on profits), and stupid is no way to go through life,
> son.
>
> But the answer is not regulations imposing net neutrality. You can
> already smell the mandates and the loopholes once Congress gets
> involved. Think special, high-speed priority for campaign commercials
> or educational videos about global warming. Or roadblocks--like
> requiring emergency 911 service--to try to kill off free Internet
> telephone services such as Skype. And who knows what else? Network
> neutrality won't be the laissez-faire sandbox its supporters think,
> but more like used kitty litter. We all know that regulations beget
> more lobbyists. I'd rather let the market sort these things out.
>
>
> <snip>
>
> So how do we fix this? Are we stuck in telco hell? Silicon Valley can
> ignite a political arms race and spend more on lobbyists, but why play
> an old man's game? Instead, these webbies should get creative, change
> the rules. Bam-Bam, not Barney Rubble is the future. Take the telcos
> and cable companies out at the knees.
>
> Here's an idea: Start screaming like a madman and using four letter
> words--like K-E-L-O. And fancier words like "eminent domain." I know,
> I know. This sounds wrong. These are privately owned wires hanging on
> poles. But so what? The government-mandated owners have been
> neglecting them for years--we are left with slums in need of
> redevelopment. Horse-drawn trolleys ruled cities, too, but had to be
> destroyed to make way for progress. How do we rip the telco's trolley
> tracks out and enable something modern and real competition?
>
> Forget the argument that telcos need to be guaranteed a return on
> investment or they won't upgrade our bandwidth. No one guarantees
> Intel a return before they spend billions in R&D on their next Pentium
> chip to beat their competitors at AMD. No one guarantees Cisco a
> return on their investment before they deploy their next router to
> beat Juniper. In real, competitive markets, the market provides access
> to capital.
>
> Without even being paid by the hour, I read through the Supreme
> Court's Kelo v. City of New London eminent domain rulings. Surely
> there exists some clever Silicon Valley counsel to twist the wording
> of the precedent. The telcos may want to treat the Internet like a
> shopping mall that they own, but the premises are looking awfully
> sketchy. So start with this line: "Economic underdevelopment and
> stagnation are also threats to the public sufficient to make their
> removal cognizable as a public purpose."
>
> Sure, property rights are important, but that doesn't mean we can't
> shake a cattle prod at our stagnant monopolists and say "update or get
> out of the way." The mantra should be "megabits to phones and gigabits
> to homes." We'll only get there via competition.
> Regulations--even regulations that look friendly to the Googles and
> Yahoos and hostile to the telcos--will just freeze us where we are
> today.
>
>
>
> <snip>
>
>
>
> We don't even know what new things are possible. Bandwidth is like
> putty in the hands of entrepreneurs--new regulations are cement. We
> don't want a town square or a dilapidated mall--we want a vibrant
> metropolis. Net neutrality is already the boring old status quo. But
> don't give in to the cable/telco status quo either. Far better to have
> competition, as long as it's real, than let Congress shape the coming
> communications chaos and creativity.
>
>
> ------------------------------
> Robert J. Berger - Internet Bandwidth Development, LLC.
> Voice: 408-882-4755 eFax: +1-408-490-2868 http://www.ibd.com
>
>
>
>
> -------------------------------------
> You are subscribed as stirland () gmail com
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> people/


--
Sarah Lai Stirland
http://www.sarahstirland.com




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