Un-DEBUNKING Vint Cerf ponders nationalizing the Internet [ or just who is the monopolist]

[David Farber <dave () farber net>]

________________________________________
From: Richard Bennett [richard () bennett com]
Sent: Thursday, July 03, 2008 10:53 AM
To: David Farber
Subject: Un-DEBUNKING Vint Cerf ponders nationalizing the Internet

The press report of Cerf's comment was substantially correct. Cerf
argued for regulatory system where the government would set prices and
conditions for broadband services. The arguments for such a system,
going back to the 1996 Telecom Act., are pretty uniform and
unconvincing. The claim that we don't have significant facilities-based
competition falls flat when we examine the numbers. The Pew survey
released yesterday shows DSL with 45% market share, cable with 39%,
wireless with 12%, and fiber with 3% (reading off a chart, numbers may
vary slightly.) Contrast this with market shares for Internet Search
where Google and its partners (including Yahoo) have 85% market share,
MS has 10% and the remaining 5% is all over the place. Which market is
more competitive?

Ironically, Google's recent press events in favor of various net
neutrality schemes consistently beat the drum of monopoly, but if we
need government action to protect Internet users from monopolies, we
need to start with the real ones before we take on the imaginary ones.

Of course, the argument is frequently made that search isn't a monopoly
because the switching cost is nil, whereas changing from cable to DSL or
FiOS will cost some serious change and major inconvenience. But who are
you going to switch to? When the dominant player has 85% of the searches
and over 90% of the revenue, it will become uneconomical for the second
player to continue at some point, and then we'll see what a true
monopoly looks like. There's an inherent conflict of interest between
search and advertising, such that the search vendor has an incentive to
manipulate search results to favor ad sales, and with only one player in
the game, maximizing revenue will be the name of the game.

So I don't lose sleep at night over the prospect of Telcos and Cablecos
manipulating packets for the sake of revenue, and neither should anybody
else.

BTW, there are some interesting comments on the Tech Lib post Seth
references,

http://techliberation.com/2008/06/27/cerf-nationalize-the-internet/#comments

Some were questions to Vint that weren't answered.

RB


David Farber wrote:
> ________________________________________
> From: Seth Finkelstein [sethf () sethf com]
> Sent: Thursday, July 03, 2008 6:46 AM
> To: David Farber; ip
> Cc: John F. McMullen
> Subject: DEBUNKING Vint Cerf ponders nationalizing the Internet
>
>         Sigh. Here we go again :-( - wolf! Wolf! WOLF! ...
>
>         The article is almost a parody of the rile-em-up technique:
>
> "Maybe I didn't fully understand him (I wasn't taking notes), and he
> certainly is better versed in the issues at hand than everyone else
> who was in that auditorium combined. But nationalizing the Internet is
> bad idea. ..."
>
>         Maybe I didn't fully understand the writer, but making up
> inflammatory fiction to get attention is a bad idea (or maybe not, to
> a certain mindset, since it certainly worked). Here's what Vint Cerf
> later explained in his own words, which, agree or disagree, is not the
> silly spin given above:
>
> http://techliberation.com/2008/06/27/cerf-nationalize-the-internet/#comments
>
> Posted by: vint cerf - 06/28/2008
>
> "My remarks, taken out of context and turned into a bumper sticker,
> don't produce very good dialog. What I was getting at is that the
> Internet is in some ways more like the road system than telephone or
> cable. These are essentially single purpose networks, each built for a
> particular application. Because there is not a great deal of consumer
> choice for these services, the usual effects of competition are
> weaker. I think the incentives now in place for broadband service
> provision have not produced significant facilities-based
> competition. An alternative that has been explored in the UK, for
> instance, is to mandate that wholesale broadband services must be
> provided, e.g., by British Telecom. this allows substantial
> competition above the IP layer for value-added services and
> substantial consumer choice for them. What I was speculating about in
> the Personal Democracy Forum was whether incentives could be provided
> that would render the Internet more like the public road system which
> is open to everyone. Manufacturers are free to invent and sell
> vehicles suitable for use on the road system. Builders are free to
> construct buildings, homes, offices, manufacturing plants that use the
> road system. But the road system itself is not owned by the private
> sector and its use is essentially open to all. The question is whether
> incentives can be found that would produce a similar effect for
> broadband Internet provision."
>
> --
> Seth Finkelstein  Consulting Programmer  http://sethf.com
> Infothought blog - http://sethf.com/infothought/blog/
> Interview: http://sethf.com/essays/major/greplaw-interview.php
>
>
>
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