Posts from Politics

Immigration

Damn. The President has done it twice in the past few weeks. He’s showing a new side of him and I like it very much.

Last night he announced a series of executive actions that “will shield up to five million people from deportation and allow many to work legally, although it offers no path to citizenship”, to quote from the New York Times.

It bothers me very much that the US, a nation of immigrants, a place where many (most?) new businesses are started by immigrants or the children of immigrants, a country that has historically welcomed others with open arms, has become closed minded when it comes to the issue of immigration. We have given a lot of time and money, and airtime here at AVC, in support of immigration reform and I have come to understand that the issue is hostage to the politics of our two main parties.

The Democrats want to remain the party of the immigrant and have been pushing for “comprehensive immigration reform” in search of a big win for its constituents. The Republicans don’t want to let tens of millions of likely Democratic voters into the voting booths in the coming years and have been against any path to citizenship and the voting booth. Both positions are understandable and rational in the context of politics. But caught in the middle are tens of millions of people who are in our country, have been in our country for a long time, and who provide much of the foundation of the hard work that gets done every day. This is not right. We must change it.

And so the President has thrown down the gauntlet and said “I’m going to do what must be done, regardless of whether you like it or not, and I have the legal right to do it.” Is this politically motivated. Hell yes. Is it the right thing to do. Hell yes. Now it is time for the Republicans to do the right thing to. Because they really have no choice.

Every once in a while good politics results in good policy. This is one of those times. Thanks Mr President.

The Cable Model and The Internet Model

The cable industry used the following model to build out the industry in the US:

1) cable operators were given local monopolies as incentive to build out the expensive last mile networks into every home in the market

2) cable operators leveraged this last mile monopoly to determine which cable channels to carry on their networks and which they would not carry

3) cable operators often required large free slugs of equity in the cable channels in order to agree to carry them on their networks

4) even with digital cable technology, cable systems rarely carry more than 1000 channels on their networks

 

The internet industry used the following model to build out the industry globally:

1) the internet was deployed on top of existing telecommunications infrastructure, initially dial-up modems that moved data over voice lines

2) no monopolies were given out as incentives to build out networks. entrepreneurs jumped in, financed by venture capital and other equity capital markets

3) anyone can put a server on the global internet and offer service to anyone. there are no gatekeepers

4) entrepreneurs don’t have to hand over slugs of their equity in order to get carriage on the global public internet

5) there are between 750mm and 1bn active domains on the global internet according to some estimates

 

These are two very different models but in one way they are converging. The last mile telcos and cable companies have taken over the internet access (last mile) market by virtue of the move from dial-up to broadband and today there is a duopoly in most local markets. It is very possible that these internet access providers could evolve the internet industry to the cable model.

And that is why Ted Cruz is wrong when he says this (at 3:50min in this talk):

This whole net neutrality thing is a fight between big boys, between gigantic companies on one side and gigantic companies on the other.

It’s actually a fight between the 1bn active domains and the roughly six or seven wired and wireless carriers who own the internet access market in the US. This is a David vs Goliath issue and the Davids don’t have the ability to go toe to toe in the market with the Goliaths. And that is why Net Neutrality is a conservative idea. Let’s keep the Internet industry operating on the Internet model and not allow it to be moved to a cable model. That is all that this is about. And I am going to do what I can to make that case to Ted Cruz and his conservative colleagues as soon as I get the chance.

Internet Freedom

The President did one of the gutsiest things he’s done in the six years he’s been in office yesterday. He came out in favor of treating access to the Internet as a basic and essential service that should be approached like phone calls, electricity, water, sewer, and the other utilities we have in our life. Politicians on the right like Ted Cruz immediately reacted negatively.

What Ted Cruz does not understand is that the Internet in the US already operates at “the speed of government.” Going slow is a feature of government, not a bug. The same is not true of something as essential and important as access to the Internet. Here are global average download speeds by country:

download speeds

Our communications policy in the US is backward. We have allowed the telcos to capture the regulators and they are spending their dollars lobbying and buying off congress instead of investing in their networks.

The telcos argue that they cannot afford to invest in their networks and yet Verizon makes $23bn in net after tax income, AT&T makes $28bn in after tax income, and Comcast makes $7bn in net after tax income. Maybe if they were investing in their networks so we can have the 100Mbps that people in Hong Kong get, I’d be a little more sympathetic to their argument.

But this isn’t really about download speeds anyway, Ted Cruz just thinks it is because he hasn’t done his homework yet to understand the issue. I hope he will.

This is about something more simple and more important. It is about making sure that the Internet remains open and free for innovation. It is about recognizing that the last mile of the wired and wireless internet is a natural monopoly/duopoly where scale creates massive advantages, just like the electrical grid and the water system. It is about making sure that the massive companies that operate these last mile monopolies don’t use their market power to extract rents from the entrepreneurs, developers, and companies that must go through those networks to reach their customers.

This is about keeping the Internet the way it has been operating for the past twenty years. This is a conservative idea. Don’t change something that has worked so well for so long. Don’t allow the telcos to start inspecting each packet and prioritizing some over others. Because that is what they want to do, and are doing, and we as a society cannot allow that to happen. Thankfully the President understands this issue. My hope is politicians like Ted Cruz will step back and take the time to really understand this issue because it is a conservative and pro business idea. This is something the GOP should get behind instead of fighting. And I’m happy to come down to Washington and explain it to anyone who is willing to listen.

Today, September 10th, Is A Day Of Protest

When you come to AVC for the first time today, you will be met with a “modal” that shows the site loading slowly. This is my way of participating in a day of protest to send a message to the FCC and others in government that I don’t want to see an Internet where some sites can pay to load more quickly than others.

We’ve discussed this issue so many times at AVC that it’s old hat to most of us. Many of you don’t see things the way I do. I understand and respect that. But today, I am showing solidarity with everyone who sees it my way.

The modal will be gone tomorrow in case it annoys you.

Why The GOP Should Embrace Net Neutrality

The politics of Net Neutrality (ie preventing the creation of fast lanes and slow lanes on the Internet) in Washington is pretty simple. Democrats are largely for Net Neutrality. Republicans are against it. The reason is simple. Net Neutrality has been sold to Washington by the telecommunications lobby as a regulatory overreach. And in that context, the politics are simple.

But if one thinks of the way the commercial Internet has operated for roughly 20 years, it has operated as a level playing field where everyone’s bits are treated the same. So Net Neutrality is just embracing the way it has always been.

Another way to look at this debate is that big corporate interests (Verizon, ATT, Comcast, etc) have been lobbying for the right to build fast lanes on the commercial Internet for almost as long as the Internet has been around and that investment is finally paying off. They have effectively bought their way into the halls of government and are now looking for their payday.

And the GOP, particularly its Tea Party wing, should find that abhorrent. As Dave Brat, who beat Eric Cantor, said:

I’m an economist. I’m pro-business. I’m pro-big business making profits. But what I’m absolutely against is big business in bed with big government. And that’s the problem.

I am headed to DC today to meet a few people and make this point. Wish me luck.

Gerrymandering’s Coming Home To Roost

So this week we saw the first time since the 19th century that a House leader lost in a primary. Some will attribute this to Cantor’s support of immigration reform. Some will see this as the ascendancy of the Tea Party on the right. I suppose both of those are true.

But I think we are seeing something else. Gerrymandering is coming home to roost.

We have turned our electoral maps into something that look like a warped jigsaw puzzle and we have districts where only Republicans can win and we have districts where only Democrats can win.

This leads to a situation where the more moderate candidate in a primary is vulnerable and the more extreme candidate is at an advantage. And we see this effect play out in the House Of Representatives.

Right now, this is more of an issue for the Republicans, where they are being driven more and more to the right every day. And that may well keep them in control of the House for a long time, but may also keep them out of the White House just as long. Because extremist positions help win primaries and primary winners take the general election in a gerrymandered district. But national elections, like the Presidential election are not won on the extremes.

This all leads to gridlock and posturing and a federal government that is more political than practical. Which is a bad thing in the long run.

This Is What Happens When You Let A Monopoly Own The Last Mile

From Business Insider:

Verizon won’t be able to hit its deadline to bring its FiOS fiber internet service to all residences in New York’s five boroughs by the end of June 2014.

and

In 2008, Verizon made an agreement to bring FiOS to any New York resident who requests it within six months.

I’ve been asking Verizon to bring FIOS to the condo apartment building the Gotham Gal and I built since 2007. They keep promising and they keep breaking those promises. That’s what monopolies do.

I hope the folks to run the FCC, the Federal Government, and local governments realize that Verizon are not to be trusted and neither are their lobbyists. They are the worst. I can’t believe we allow them and their brethren to continue to control the last mile access to the Internet here in the US.

The Veterans Affair

I was down in Virginia visiting my parents this past week. We talked a bit about the latest VA scandal. My parents spent their adult life in the military. My dad as an army officer. My mom as an army wife. They know a bit about this topic.

My dad was saying that injured soldiers in recent wars survive a lot more frequently and as a result we have more injured and less deceased soldiers. But we have not, as a country, made the required investment to care for the increased volume of injured veterans.

There is an editorial in today’s New York Times from a veteran named Colby Buzzell. It is worth reading. Colby says:

Politicians and many hawkish Americans are quick to send our sons and daughters to go off to fight in wars on foreign soil, but reluctant to pay the cost.

On this memorial day, it is important to remember both the deceased and surviving veterans. Their sacrifices are the price of freedom and we should commit to support them to the utmost. That we do not is a national shame.

A Sad Day For Patent Reform

I received this note in my inbox yesterday:

As you have possibly heard, earlier today, Vermont Senator Patrick Leahy, the Senate Judiciary Committee chairman, announced that he is tabling patent reform legislation that was supposed to come up for a vote tomorrow

This is a sad (hopefully temporary) end for the litigation reform efforts that had passed the House by an incredible, bipartisan margin and that the President mentioned in his most recent State of the Union Address.

In the last few days, we were seeing good compromise language coming out of negotiations between Republicans and Democrats, specifically Senators Cornyn and Schumer, and were optimistic the bill would come to a vote quickly. But the committee chair can unilaterally stop legislation and Leahy has opted to do so. For what it’s worth, we’re hearing that we was pressured to do so by Senator Reid.

This means we likely won’t be seeing fee shifting and other important measures that would have helped protect startups from patent trolls this year.

This pisses me off. And I am not the only one who is upset about this. Rackspace has a great post up on their blog today.

Here is the deal. Information technology startups are probably spending hundreds of millions of dollars collectively on an annual basis fighting off patent trolls. This is a tax on innovation and, I would argue, borderline theft. It must come to an end.