more on Summary for Congress of proposed NN Act Proposal

[David Farber <dave () farber net>]

Begin forwarded message:

From: Gerry Faulhaber <gerry-faulhaber () mchsi com>
Date: June 22, 2006 10:14:14 AM EDT
To: dave () farber net
Subject: Re: [IP] more on Summary for Congress of proposed NN Act  
Proposal

Sometimes I think that Bob Frankston is just way more advanced than I  
am;-) But after wading through it all, Bob is recommending "community  
ownership" of broadband infrastructure which is actually just another  
form of competitive entry.  And of course I'm all for competitive  
entry.  So, if this is such a great idea, how come it's not sweeping  
the country?  In a sense, community ownership's opportunity is right  
now, with all the buzz about muni WiFi.  But are mayors riding to  
easy re-election championing community broadband?  Are the peasants  
marching on the castle with pitchforks demanding community  
broadband?  Even here in Philadelphia, the poster child for muni  
WiFi, the public response has hardly been overwhelming.

I would certainly be in favor of it, should it actually be  
occurring.  But if it is such a great idea, how come it is relatively  
rare?  And, to paraphrase my earlier comment re: business plans, how  
come Bob (or other IPer) isn't at the forefront of a national  
coalition helping eager communities build their own infrastructure?

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

----- Original Message ----- From: "David Farber" <dave () farber net>
To: <ip () v2 listbox com>
Sent: Thursday, June 22, 2006 9:16 AM
Subject: [IP] more on Summary for Congress of proposed NN Act Proposal




Begin forwarded message:

From: Bob Frankston <Bob2-19-0501 () bobf frankston com>
Date: June 21, 2006 8:21:16 PM EDT
To: dave () farber net, ip () v2 listbox com
Cc: "'Dana Blankenhorn'" <dana () a-clue com>, Gerry Faulhaber <gerry-
faulhaber () mchsi com>
Subject: RE: [IP] more on Summary for Congress of proposed NN Act
Proposal

The reason we don’t have facilities competition is that there really
isn’t a separate business in facilities competition any more than
there is a business in competitive electric distribution. Mandated
pole access is a good idea but I expect it will quickly lead to
viewing the bit paths as simple infrastructure.

The reason we don’t ask for competitive electric distribution is that
we don’t buy light, we buy electricity. At first people did buy light
and you still some buildings labeled “Municipal Light Company” or
something like that.

As long as we frame the debate in terms of services and fund the
infrastructure by selling services we have a problem. You can’t fund
the transport if users create services themselves and you can’t sell
bits at a price that covers the cost of the infrastructure unless you
limit the supply because the bits have no value until they are turned
into a service outside the network.

As I note in http://www.frankston.com/?name=Opportunity the value of
the term “network neutrality” is in giving voice to the sense that
the carriers are not playing fair if they do something like block
VoIP or try to get a cut of the users’ value. I do worry about being
too specific since what is important is the marketplace dynamic not
the particular implementation of the current Internet. We don’t even
have to require global addresses because, as Skype has shown, we can
program around such things.

If we look back at what happened when we were able to own our own
phones and then later the phone wires in our homes we can see that
people do indeed pay for infrastructure when they understand the
value. There is no reason that doesn’t extend to community
infrastructure be it roads, sewers or bit paths.

Even better when the cost is reduced because we have a shared
infrastructure rather than having each service provider have to build
a separate infrastructure and then watch all the value disappear as
others use the transport but create new services outside the network.
The carriers should indeed be angry but the solution is not to
prevent competition – the carriers should be asking themselves why
they have to pay for the infrastructure. They should be the first
advocate community ownership.

Of course the carriers see control of the infrastructure as giving
them an advantage in the marketplace but the FTC should be asking
hard questions about such tie-ins. The carriers may also believe that
they need control because they still think in terms of scarcity and
can’t imagine that a community would deploy enough capacity even as
they leave many gigabits of copper fallow by carrying only an
occasional phone call per pair.

The carriers’ plight is deeper as new services aren’t using their
infrastructure anyway – the studios (AKA, TV broadcasters) are
already assuming a download and peer model for distribution since
only a small amount of their content needs streaming anyway.

Once we have the idea of infrastructure—the community owning the
connectivity—and we fund the infrastructure transparently as
infrastructure we go far far beyond network neutrality. We no longer
have to contain the bits within billing paths and there is no reason
not to leak it out to provide ubiquitous and extensible wireless
coverage. This is where things get exciting because that’s a real
tipping point – once we get past the fear of abundance (as the
carriers explicitly decry in http://www.frankston.com/?
name=AssuringScarcity) we have no barriers against ubiquitous
wireless coverage and, even better, anyone can extend coverage even
to subbasements or caves or wherever. You can then have you medical
alert bracelet call home instead of waiting for someone to read it
and then find a phone.

This why I don’t like the whole focus on broadband and am not
convinced Korea is the right model. I sued to think minitel in France
was a great idea but in the end it kept them off the Internet. I
think of broadband as being like a railroad when we really want to be
able to walk and drive where we please. It’s easy to get speed but
coverage is more important.

We can argue about the technical details of how infrastructure works
but it would be hard to do worse than today’s misaligned incentives.

For entertainment purposes you can read about viewing sidewalks in
terms of services. Of course no one would charge for sidewalks –
after all it’s just concrete and dirt and maybe some hops, skips and
jumps when we go groundless for a short distance.



-----Original Message-----
From: David Farber [mailto:dave () farber net]
Sent: Wednesday, June 21, 2006 10:15
To: ip () v2 listbox com
Subject: [IP] more on Summary for Congress of proposed NN Act Proposal







Begin forwarded message:

From:   Gerry Faulhaber <gerry-faulhaber () mchsi com>

Date:    June 21, 2006 10:07:41 AM EDT

To:       dave () farber net

Cc:       faulhaber () wharton upenn edu

Subject:            Re: [IP] Summary for Congress of proposed NN Act
Proposal



[for IP]

Amazingly, I find myself in agreement with Dana Blankenhorn. This
business of restricting the use of Internet to only service that
follows IETF/RFC protocols really is fairy dust. Does anyone think
that customers really care about “IETF/RFC Inside”? In the few
minutes since I read Dana’s post, I have thought of a dozen names
that Comcast/Verizon could call it other than Internet that would
work just fine in the marketplace. And what about all the non-
complying systems in place today?

I also wholeheartedly agree with Dana about making the market
competitive as the only true solution to this. However, he seems to
think that Congress must act to “take away their monopoly right of
way.” In fact, Congress already did; the Telecom Act of 96 removed
all local monopoly franchises, period. Even further back, there are
FCC Pole Attachment rules requiring telephone companies to share
their poles at specified rates. Everything is actually in place for
competitors to enter.

The question is: with all the railing against “monopoly” BB
providers, and all the rant about how well it works in Korea, how
come we haven’t seen competitive entry? And with all the hype about
unlicensed wireless as the answer to the maiden’s prayer, how come we
have almost no private entry into wireless BB (except Clearwire)?
I’ll bet if all those great entrepreneurs spent less time writing
outraged letters to Congress, IP, etc., and more time building a
business plan to offer competitive BB, all our problems would be
solved. And yet, and yet....where are the competitors? Why so much
whining and so little market entry? Come on, guys; if it’s a great
business for Comcast/Verizon (highly questionable, actually) then it
should be a great business for you. Yeah, it’s you I’m talkin’ to,
buddy.

Dana has it absolutely right; what he doesn’t have (and should have)
is a business plan. If he doesn’t have it, then why not any of those
guys who signed on to the Internet Platform thing?

Professor Gerald Faulhaber

Wharton School, Univ of Pennsylvania

Philadelphia, PA 10194

Professor Univ of Pennsylvania Law School



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