Would AT&T or Comcast Have Created Google?
The answer to that question is no. They had their chances. In the early days of the Internet, when dial-up was king, the telco companies were in the driver's seat. They had the customer relationships. They had the on-ramp to the Internet. But they did not create Google, Skype, Facebook, or even TCP/IP.
Why am I talking about this? Because on Thursday of this week the comments on the FCC's notice of rulemaking on Net Neutrality are due.
And here is what is at stake: the architecture of the Internet.
If we let the providers of Internet access control what runs on their pipes, we will cripple the elegantly layered architecture of the Internet where access is decoupled from applications. And it is that elegantly layered architecture that begat Google, Skype, Facebook, and so very much more.
Don't sit on the sidelines in this debate. Make your voices heard. You can start right here in the comments if you'd like.
i hope the fcc supports an open internet. if they don’t, the internet provider who gives “open” access will get my vote (my dollar “vote”), regardless of how much more they may cost. that provider, will make a killing. maybe that provider doesn’t exist yet, but what a beautiful market opportunity.my two cents: the fcc will make the correct decision, and this thread will be a hypothetical.
I hope so but the lobbying by the carriers is intense. Its hard to fightentrenched interests in Washington
Totally agree Subbu. A dumb pipe will win.
Well said. FCC Chair Genachowski has shown that he is firmly on the side of network neutrality and the FCC has been a good force for deregulation for some time. I believe they will make the right decision.
how much is the maximum you are willing to pay? And for what, what if it limits your bandwidth for the sake of openness (always a possibility)
Do power suppliers ask their customers what their gona use their plugs for ? Why would it be any different ?Kill the net neutrality and you kill the Internet.
Great point, but the power suppliers don’t care because they charge you for every watt.
Which is inevitable with bandwidth providers too (particularly in mobile). We’ll soon be paying for every bit, flat rate unlimited data will not survive.
…and I am screwed.
Cost per bit will still go down, you’ll be ok Reece 😉
It doesn’t look like you’re charging flat rate. You should be fine.
You mean for my business? We do in fact currently charge flat rates.
I meant personally – I consume tons of data (as we all do I suspect).
I disagree concerning what I think we’ll see in the mobile space.Mobile operators are soon to be nothing more than basic ISPs. Technology bridged voice and data, and soon the flat rate for unlimited access will rule them all.You pay a flat rate for broadband, you use a computer to access a network, and use software to communicate through it. Google will play nice in that game, they have the device, the OS, and the VOIP technology (Google Voice).
Where will the spectrum to support this come from? The electromagnetic spectrum fairy? Unlike in landline applications where you can just run parallel fibers through the conduit the amount of data you can stuff through a given piece of spectrum is finite.
4G looks faster than my landline
Sure, when you’re the only one using it. The problem is contention.
I see a highly functional mashup of mobile to landline architecture that is defined by dumb pipes. Heck if communication providers want to create their own content, they’re more than free to. Controlling information (censorship) is where I draw the line though.
You divide network cells to smaller and smaller children cells. In addition,technology is not standing still waiting for the limits to be reached.
That is an enormously expensive proposition.As for improved technology, leaving the cost side out of it; At the far end of engineering you run into physics.
Very expensive with today’s technology, and with today’s limited production.Scaling could change a lot of things to this matter.At the end of engineering your run into physics, but never out of newideas.
and i think that is a good thing
They all did before the iPhone changed everything, and they still do for SMSmessages.Their cost structure is very different. They invest, operate and maintain anetwork, they don’t “produce” what goes through it.
You have a point, but (in theory) bandwidth is still a limited resource and as was said earlier, it’s “their pipe.”
So at face value this seems obvious to me that we should maintain the status quo and keep net neutrality. I do not see why we need to help companies reinvent themselves so that are do not become commodities.I did hear somewhere online though that South Korea has been able to create better services and the growth of bandwidth speeds have outperformed the rest of the world because they abandoned net neutrality though. How much truth is there in that? A little? Nothing?
Fred, thanks for continuing to raise the issue.Having fought in California against the Advertising (Nexus) Tax last year and watching it around the country (including inaction in DC), I fear that politicians won’t have any understanding of tech issues and that they will listen only to the well-funded lobbyists.I remain hopeful. Cable and telcos haven’t proven worthy of making technology decisions. Of course, if Congress makes the wrong decision, won’t the free market give rise to new ISPs who give us an open Internet? What about Google Energy as an ISP (http://dlew.is/ge1)?
“If we let the providers of Internet access control what runs on their pipes.” Those last two words stick out to me…While the true capitalist in me wants to argue that “it’s their pipe, they can do [charge] what they want with it,” I can’t honestly support it.It simply doesn’t make sense, and I do think (errrr… hope), that if the FCC f***s this up, the free market will somehow correct it with demand for a better provider.Andy Swan touched on the topic and raised the question yesterday – “At what point in the wealth-creation cycle does “equality of result” defeat “incentive to create”?” http://andyswan.com/blog/20…
Of course the market will create a better provider, as long as a better provider is ALLOWED.Why must competitive innovation lie only in the hands of the end web-site?I agree…this seems like a classic case of assuming that innovation will come from where it came from, and that “now that we’ve gotten here, it’s time to level the playing field” self-handcuffing that I despise
Except the providers were granted special rights from the gov’t to be in the position they are now. Therefore, they must also be regulated to make sure they don’t abuse that special position they have been granted….I think the ‘free market’ cry rings hollow for these guys.
Excellent point Marko. A fact that was perhaps lost in the shuffle a bit… with privilege comes responsibility.
It’s a fair point. How long can gov hold that over their heads though?And more importantly, how sure are we that FROM HERE the innovation won’t come from them.Andy
You act like the government hasn’t given the telcos any benefit since creating their monopoly position. How about billions in subsidy for fiber optic deployment that they never did?http://www.newnetworks.com/…
My reaction to that is that I am NOT shocked….and that there’s one morereason I don’t want the government having a hand in the businesses thatprovide our data connections.This “but they gave them this so now they can take away that” nonsense isexhausting. How about this…..breakup at $10b marketcap, no subsidies(only contracts for specific work), and no regulation of business practicesor product offerings?
How about, instead of auctioning off wireless spectrum, we set it aside as open commons using technologies like wifi?
That actually would be very innovative on the hardware side to make sure we all don’t collide. (The mob at it after all) But it would also mean we could have a lot more bandwidth once we figure that out.
Had a long talk with a coworker yesterday about infrastructure. He’s a fan of big gov prompting mega infrastructure (contracts, cheap loans). I’d like to find a way for gov to entice businesses to continually build out (maintain & improve) our infrastructure.The US government had a history of prompting large construction like telephone, bridges, highways, and even canals. They could do this through contracts but I’d prefer a contest of standards, then let private providers grow a healthy/competitive ecosystem.Whenever gov is completely responsible for infrastructure waste creeps in, rapidly.We don’t have that type of ecosystem now for Net providing. But we know it’s not quite right. At least that’s a first step in working towards a form of adaptive infrastructure, we can count on getting better.
not to mention instead of using tax dollars to regulate (i.e. net neutrality) why not use tax dollars to fund startups/competitors, to make the market more competitive
Gotta meet you kid, got to
Many were granted special rights and subsidies like the ILECs created and funded to build out rural telephone networks and RBOCs to deliver long distance. Many weren’t, however, like cable companies (unless you count cable franchise agreements which focused on video). To lump the two into one regulated pile would be a mistake, especially as wireless competition grows. You will end up with the RBOCs (ATT, Verizon) controlling the entire network.
why not govt fund competitors….govt grants to competitors to breakup the monopoly….there is going to be a govt cost in enforcing net neutrality, i’d rather see govt intervene to create a more competitive market.
Because if the pipe is kept done, then lots of different unrelated innovations can be created by uncoordinated parties. Whereas if the pipe starts to get optimized around the vision of the oligopolists, it will be likely to choke off unanticipated behaviors/innovations.http://webseitz.fluxent.com…
Good point from Andy. The Market would have to be free enough to untrench a monolith that owns the current infrastructure.
Net Neutrality is definitely is definitely a very important topic, but how is it related to the relative inventiveness of the access providers?One could argue that AT&T is responsible for the “elegantly layered architecture” of the Internet, primarily by virtue of being the home of Unix and C (see also: http://en.wikipedia.org/wik….
of course, at the time they were a regulated monopoly. andyswan, I’m sure EXACTLY right is how you would describe a time when you couldn’t even own your phone but had to rent it from Ma Bell.
Lol ya I’m a sucker for fed gov mandated monopolies.Either that or I actively promote a “automatic breakup of all companies over 1b marketcap”.
Even Google? or Apple? 😉
Yes, if only for the opportunity to let youtube fail lol
It’s an open secret that Google will probably have to be broken down eventually. It says a lot about the US when A search engine carries more than 75% of searches on a search engine in the US. And that’s before say searching on Youtube or another property.I mean, DeBeers owned 90% of the worlds diamonds in 1902, but Google some days cuts it close when it comes to all things internet. This feels like a friendly waiting game…
If you read a history of the early days of the Internet (my favorite is “When Wizards Stay Up Late”), it’s pretty clear that AT&T is not only not responsible for the Internet, but actively fought it. Partly because they didn’t get it, and partly because it didn’t favor their business model.One of the historical competitors to the Internet was OSI, which was developed by AT&T and other telcos. I never used it much, but my understanding from reading and from the experience of pals was that it was clumsy and overdone, the product less of experience and more of theory. I’m told it had a more top-down flavor, in contrast to the bottom-up, peer-oriented approach of TCP/IP.
let’s define the problem and the solution.1. the problem is that there is excessive concentration of wealth/power/market share amongst ISPs. the problem IS NOT about the architecture of the internet being jeopardized. this is an issue of market share and the market operating in a dysfunctional manner. it is crucial to understand what the problem is to find a solution.2. the real solution is to fix monetary policy. moentary policy is why we have excess wealth concentration in ALL industries, not just amongst ISP. it’s why 1% own everythign and everyone else is in debt to that 1%.now, fred and the venture capital community just wants net neutrality because that helps their investments (for now…..although that will soon change as open source shifts value away SaaS and towards content producers and API remixers). they also like inflationary monetary policy because that lets them raise big funds, gamble in the stock market, and basically enjoy a huge, unfair advantage. not their fault, but certainly the incentive is to be willfully ignorant of this little problem.
I can honestly say I saw this one coming (nice tie in Kid). I think the problem is in believing any specific group can control the Net or any of it’s extensions. Silly.That’s like me saying, “the Internet is cancelled, go back to broadcast tv”.It’s not going to happen.
Please explain how the businesses will value SaaS and an API remix differently? Under what circumstance and for whom?
Fred I am more concerned with the NBCUniComcastMicrosftGE Deal..then they will build “google” and have a reason to only deliver their google. Not to mention subtly all other standards will be warped by their over whelming stake of the entire delivery system of the countrys main communication system. Remember last spring Comcast got approval to own more of the delivery market than anti-trust regs at the time really allowed (even after the last 20 yrs of predominantly anti reg administration has been on the march) all of this opens a door for Google to expand into a competition with them … I have 4 words …too big too fail. Google, Comcastgoliath, a biopoly of our entire internet and communication infrastructure. and as important as I think net neutrality is, it will have a tough time changing internal discussion of regulations and laws that will shape what gets priority if there is a biopoly who both have giant seats at the front of the room with the federal government because they “are” the majority of the market. That’s not an open market.
What are the chances that Google evolves into a version of the old AT&T? How does the Net Neutrality debate play into that?
Good point. They are pushing Google to get it’s own pipes. Decoupling of pipes and content is important.
While I totally agree that letting ISPs charge by data use type would be a disaster, I think there might be barely enough competition (phone guys, cable, fixed and mobile wireless) that it’s not going to happen anyways. At least I hope.The arguments that Google etc doesn’t currently pay for bandwidth are comically uninformed. Anyone who runs a website knows you pay for bandwidth. The proposal here seems to be charging by usage twice, once on the website side and once on the ISP side.I write more about silly arguments against net neutrality here http://cdixon.org/2009/09/2…
great post Chris. i somehow missed that one
Thanks. I am just constantly amazed that people writing op-ed’s for major newspapers are so misinformed about basic facts like those I point out in the post. At least on tech issues I know enough to realize this. God only knows what they are getting wrong in op-eds on foreign policy, economics etc.
Many of us are inclined to forget that being digital requires a lot of physical.
Lobby dollars rule in DC. I would be shocked if they made the right decision here. It’s really sad what passes for “legislation”.
Fortunately, the entire debate is nonsense. Providers will be competitive and offer the best possible plans to try to acquire the dollar of the consumer.It is not the role of the Federal Government to dictate how a provider does business or charges its customers (on either side of the wire). The role of the Federal Government is to ensure that the consumer has alternative solutions in the form of other companies/organizations. Are we really going to have the Federal Government tell a provider whose competitive advantage is “we provide internet access to kids” that they are not allowed to filter out porn sites? This seems like a massive violation of the First Amendment to me.As always, there are MASSIVE unintended consequences to heavy-handed regulation. What innovations in pipe-creation and pipe-laying might be thwarted in the future from such a “your pipe must be exactly the same as his pipe” mentality? Why can’t a provider startup that offers free downloads from locally owned/operated websites, but charges for others? etc.Everyone seems to be ignoring the role of the marketplace….which, unlike policy….is responsible for the internet as we know it…..and will be responsible for its future as long as we allow it to do so—-regardless of whether the innovations come from the content providers, access providers, or some other provider that as of yet does not even exist!
andy, the government gave these carriers local monopolies which funded their buildouts. it is right for government to regulate how they use that monopoly power. a better answer would be to undo the monopolies and get to a highly competitive market. but we don’t and won’t have that for a long time to come.
I’m fine with that solution and I don’t see why we’re working towardsanything less.I reject the concept that the government “gave” carriers local monopolies.The government allowed them, because of the services the companies providedto the area IN RETURN. If you can show me the contract where carriers said”If you allow us to build this out as a monopoly, we will be indebted toyou, the government, and will submit to all regulation you desire forever”,then I’ll agree.But this concept of “if the government does you a favor you owe themeverything forever” is dangerous. Just look at how the shakedown artistsare trying to limit executive pay at companies that PAID BACK THE TARPbecause “we saved you once”. By that logic, the US should have free reignto regulate and tax France, Germany, Kuwait and a host of other nations,forever.
Reject whatever you want, but you’re letting your opinions get in the way of learning facts.The federal Cable Communications Policy Act of 1984 made local cable monopolies possible (including protection from AT&T, which otherwise would have crushed the fledgling cable companies), and individual deals with local governments were the mechanism for that. AT&T’s national monopoly started with the 1913 Kingsbury Commitment.Opining stridently on a topic where you don’t even know basic history is not a good way to build your credibility.For those interested in why AT&T didn’t (and wouldn’t) have invented the internet, read the excellent book “When Wizards Stay Up Late”. It’s a very readable history of the early days of the Internet, and makes AT&T’s inability to even grasp the concept quite apparent.
I do not dispute the history. I dispute it’s ramifications (especially those dealing with Fed role) on the present and future.
Whether or not there’s an advance legal contract between the government and the monopolist is immaterial. There’s a social contract, one that we express through the laws.We regulate monopolies because they are no longer subject to the discipline of the marketplace. A business can choose to be regulated either by fair competition or by the power of the state, but it can’t choose to run wild. Why? Because this is a nation built on free-market capitalism, not suit-and-tie oligarchy.Sometimes the government does make explicit grants of monopoly, as it did to both telephone and cable companies. But even if that somehow hadn’t happened, it wouldn’t make them magically free to dominate their customers.
Correct. Government’s role is to ensure that there are alternatives for the consumer.We don’t disagree there….we just disagree on whether or not the government wins the right to regulate beyond Constitutional confines because a monopoly was permitted in that industry in the past.Did the government and the citizens receive no benefit from the monopoly while it was alive? If not, why did they agree to establish it?
Past monopoly matters because monopolies are self-sustaining; monopoly rents allow them to outspend fair competition and monopoly market power gives them other opportunities to avoid the discipline of the marketplace. (Basically the same applies to oligopolies, too.)That the government supported the monopoly with legislation is relevant in two ways. First, government support means the monopolists had the opportunity to become deeply entrenched, a sign that we need to be especially watchful as we attempt to restore a true marketplace.Second, if a business has been supported by the government for decades, it seems only fair to people that the government swing just as vigorously the other way until a) we have brought a real market back to life, and b) until all the unnatural advantage gained from the government support has been given up.
I disagree with this: There are too many actors in society to say that monopolies are self-sustaining by there very nature. They may end up in headwinds that only the agile and small can take on.DeBeers ended up losing a large chunk of its market that way…
Good point. Rather, let’s say they tend to be self-sustaining.
Actually, sounds like you disputed history but are now backpedaling.
I said the feds did not GIVE a monopoly….they allowed it in exchange for the services and suppressed pricing it provided to the area. That’s two different things and ignoring the BENEFIT that the government ALREADY received from the monopoly is how we get into this “you owe us for life” heavy-handed nonsense.
In both cases, the monopolies were given, in that the government explicitly protected and supported monopoly players, rather than just tolerating them. The regulated suppression of monopoly prices isn’t something that one gets in trade for having a monopoly; it’s just an attempt to simulate the suppression of gouging that comes from a real marketplace.
It wasn’t beneficial to them economically- they wanted to hinder them to use a central switching system. And they invested heavily to build the best damn switching system with the best quality calls one could have.I mean they were very inventive in a derivative way. But it only pushes you so far before you need to look at an old problem through a new lens or a new problem that no one knew about. Refusal to recognize problems can cause a small actor to become very big very quickly. As we know from the likes of Google.The questions for me is, who has the new lens?
It also reflects poorly on your credibility to reject andyswan’s entire argument because you don’t believe he pays appropriate homage to the history as you see it.Andy’s basic point is spot on. While I don’t want a broadband provider deciding which parts of the Internet I can view or not, I don’t want the government deciding that either. If net neutrality were as simple as waving a wand and making access to all sites, services, protocols, and applications equal then the FCC might be up to the task. The reality is far more complex. Just two pieces of the net neutrality puzzle, QOS and bandwidth are complex enough that it is unlikely any Federal agency could effectively mandate requirements, ensure compliance and measure effectiveness. I, like Andy, prefer to allow the market to ensure an open Internet.As for the original post, I was surprised to see Comcast says they are supportive of defining rules around this area. If you read their blog, David L. Cohen, Comcast’s EVP of Broadband says “And Comcast, in turn, has been supportive of this FCC’s actions to bring some clarity to this unsettled area.” He goes on to say, “It’s truly sad that the debate around “net neutrality,” or the need to regulate to “preserve an open Internet,” has been filled with so much rhetoric, vituperation, and confusion. That’s gone on long enough. It is time to move on, and for the FCC to decide, in a clear and reasoned way, whether and what rules are needed to “preserve an open Internet,” and to whom they should apply and how.” I think this flies in the face of a lot of the rhetoric in the debate.http://blog.comcast.com/201…
that’s not what their lobbyists are saying
To be clear, i didn’t reject Andy’s argument in that comment, and your claim otherwise is puzzling. I just disputed his assertion that there was no government grant of monopoly. Given that Fred’s post here is about what the history of telecom monopolies implies for the future, I think it’s crucial that we actually know and acknowledge that history.That said, it happens that I do reject his entire argument and yours as well, and for the same reason: allowing the market to determine things only works when there is an actual market, not the oligopoly that the monopoly-funded players are striving to create.As an entrepreneur from a family of entrepreneurs, I’m a huge fan of free-market capitalism. Which is precisely why — in this rare instance — I’m in favor of vigorous government enforcement of net neutrality.Normal market mechanisms currently are not serving to keep giant telco players in check, and they haven’t for a century — which again brings us back to the need to know the history. When telecommunications was not crucial to our economic growth, it was fine to let AT&T extract monopoly rents, suppress innovation, and crush the occasional competition.But the Internet is vital to America’s success this century, and we are barely at the beginning of the Internet-fueled innovation that we will see. Assuming, of course, that we keep the Internet in the same upstart-friendly condition that characterizes its early years.
Instead of net neutrality why not break them up in a big, meaningful way? This could work for all companies over $1b or $10b market cap.p.s. I did NOT reject that a monopoly was approved by the government. I rejected that it was GIVEN (as in, a gift). There is a LOT that the feds got out of that monopoly while it was in tact, and THAT is why it was allowed, and THAT is why I reject that these companies still “owe it to the government” to accept whatever regulations it wants to place on them.
If you can persuade AT&T and Comcast to break themselves up into units small and independent enough that they can no longer extract monopoly rents or suppress innovation, I’d entirely prefer that to Net Neutrality regulation. (And so, probably, would most of their employees; working for giant, market-insensitive corporations is not nearly as much fun as trying to stay one step ahead of the competition.)But a breakup doesn’t strike me as a politically viable solution, so I’m willing to grant them their oligopoly on dumb pipes so long as the FCC makes sure they don’t screw up the level playing field that the Internet has so far provided.
Just so I get this straight….If I want to start a carrier with $1b of my own money….and I want to target specifically the “home-school” and “private schools”market…..and therefore I want no porn and no foul language to reach my customers, andTHAT is my competitive advantage (yes we’re slower than comcast, but nosoftware needed!)…..You’re saying you are fine with the Federal Government telling me that I amnot allowed to do that. That I am not allowed to in any way differentiatemy product from those of the oligopoly.You’re comfortable with that from a First Amendment perspective?
It’s not clear to me what the first amendment has to do with this, so maybe I’m missing your point. But yes, I’m ok with that.It’s equivalent to the “common carrier” regulations that phone companies operated under for decades without apparent harm. Like any regulation, it’s not perfect, but I believe that it’s a pretty straightforward way to keep telcos from suppressing innovation.In your specific example, people could pretty easily get an equivalent benefit through other means (like filtering software or filtering in-home routers), so there’s no real harm to the consumer.
Well I guess that puts the “safe carrier”, or the “research sites only so it’s always blazing fast carrier” out of business before they even start….because THEIR innovations aren’t deemed worthy of a marketplace test.Or maybe they could appeal to a panel of congressmen for an excemption?! That way THEY could owe the government forever too. No worries….when has government regulation forcing private companies to do things they don’t want to, or make loans they don’t want to, ever caused systemic collapse……right?
We tried that once with At&T. It didn’t really work as well as we’d like it, if one looks at the entire At&T corporation post. They’re now one of the bigger carriers of Wireless and wired data nationwide- not quite the original plan….
Let me restate your position. I didn’t reject the argument(s), but now I do? Interesting.To want the Federal gov’t to intercede means one must trust the FCC to: a) keep up with fast moving, dynamic technology and markets they do not now and will never fully understand, b) fairly arbitrate between competing interests, while keeping the public interest at the forefront and not falling prey to lobbyists (from any party). I can’t get there and I’ve not seen any evidence in the “pro net neutrality” arguments that persuade me to believe otherwise. In fact, the pro net neutrality mantra is really just a proxy for pro-regulation of markets and business. Gov’t regulation of dynamic markets doesn’t work, it never has and it never will. Worse yet, despite the best intentions of the regulators (and the proponents of regulation) it ALWAYS leads to unintended consequences which are often worse than the “disease”.I do not believe the FCC can keep up, I don’t trust them to fairly arbitrate and I believe the market will work. As evidence the market is working just look at innovation by telcos and cablecos vis-a-vis bandwidth. Bandwidth defined by cost/megabit shows that the market is working. As you are fond of saying, it’s helpful to understand the history here too.15+ years ago there were any number of independent ISPs all selling Internet access via dialup. Prices varied, but it’s safe to say that you had to pay about $20+/month for 9600 or 14.4 access. Add in the cost of a phone line and the total cost was between $40 and $70 per month. Sure, the phone line might be shared for voice and data, but you had to pick one or the other (how quaint).Contrast that to today where most Americans have access to multi-megabit broadband for the same price or less. Many have a choice of providers. I have access to both FiOS and Comcast broadband with speeds up to 50Mb/sec. I’ve also got access to 3G from AT&T, Sprint, Verizon and T-Mobile, 4G from Sprint (6-7 Mb/sec) and WiMax from Clearwire. Back in 1995 I never dreamed I’d have 50Mb/sec at my home and you didn’t either.All of this happened not because of gov’t, but despite it. If Comcast or Verizon gets complacent, or blocks access to network services–they will lose. Consumers switched to broadband because it gave them faster access to the services they wanted. Google, Yahoo and others couldn’t flourish without broadband infrastructure investments by companies like Comcast, AT&T and Verizon. Those original ISPs couldn’t have made the necessary investments to bring about broadband–the investment was too great. In my view, “Big Telco” doesn’t get enough credit for the innovations they have brought to the market.
I think you are right about the investment into broadband. I disagree with your perspective on the markets VS the FCC/SEC et al.I think both groups (providers versus developers of applications) are right now looking at each other as enemies rather than friends- without the applications there, why would anyone even bother going for something high speed, but without the high speed, why would I build something that needs a lot of bandwidth? Neither group has full power over the other, as much as we want to think so.That all said and done, I don’t think the market alone will resolve who has slightly more power at any given moment in the shifting sands of time. Considering this will probably be a floating issue for some period of time (I expect this to be an ongoing issue for a long part of my lifetime), I think putting together a proper regulatory arena where the market can sort out fact from fiction is something needed.To put this argument in perspective:In 1995, I was 8. My dad had a modem. I had a toy chalkboard and was learning to write my first paragraph, and I was using a computer to play some game that involved some guy solving crime from an evil genius through math problems. It was a bit pixelated.The fact that you are still discussing an issue that was occurring when I was 8 is kind of telling how little we’ve resolved because frankly, I don’t think we fully understood what was going on back then. I think we have much more wisdom now. (though not me personally, I remember being in second grade, I mean y’all) Getting a proper framework together to even examine the issue is a much bigger priority…
Your skepticism of the FCC is reasonable; I would also prefer another option. But I don’t think the market approach will work here. As an entrepreneur, I prefer markets too, but I don’t think they exist meaningfully under the sort or oligopolistic conditions that the major telcos are striving for.That technological progress has happened in the past doesn’t mean that it will happen in the future; the same conditions have to exist. Absent government intervention, I believe they won’t.Right now the major players are making a land grab equivalent to the one that the telephone providers did in the early 20th century, and cable companies did in the 80s. The are doing this because they want to come as close to their previous monopolies as possible. Given that the can continue to use monopoly rents to push out other players, there is every reason to believe they will succeed.The best evidence of the upcoming reversion in the market is the behavior that triggered the Net Neutrality movement in the first place. As the telcos approach broadband oligopoly, they are starting to shift their attention away from providing value and toward extracting rent.The latest example comes yesterday on Venturebeat, when a cable company executive thought it was terribly unfair that users could run the Skype app without the cable companies getting paid by Skype as well as by both ends of the connection. And that’s how innovation will die on the internet: toll by toll, block by block.
“All of this happened not because of gov’t, but despite it.”Seems I remember back in the early 90s, the Fed govt started giving out what amounted to around $900M to be used by these guys to build out a highspeed infrastructure for the US. Seems there was a requirement for these guys to build out 100Mbps services to cover something like 90% of the nation by the year 2000. Seems also that that requirement was rescinded in 1999, as it became obvious these guys were just not gonna do it. Did they give the money back? As it turns out, the government didn’t ask for the cash back, it turned into a gift from the American taxpayer.In spite of the government? I think not.”Back in 1995 I never dreamed I’d have 50Mb/sec at my home and you didn’t either.”Back in 1995, I KNEW I would have 50Mbps service by 2000, because I trusted the companies to honor their agreement with the US govt. – but by 2000 I was pretty certain I’d have to wait for decades to see it, if ever. Right now, the maximum speed I can get from TimeWarner is about 7Mbps, regardless of what is advertised as their ‘up to’ limit. And my uploads? Forget about seeing greater than half a meg – even though 2 years ago I could buy a 2Meg upload with my 6 Meg download.From my perspective, things are moving much slower on the net these days.
Jon, your arguments, if true would further bolster my point that broadband deployments and innovation have happened despite government not because of it.I think it’s important to correct a couple of points in your statement. In the early 90s, there was no $900M US gov’t subsidy for broadband. Even if there had been, $900M wouldn’t build broadband to cover 90% of the US. I believe you are referring to the USF, RUS and other taxes levied on urban citizens to subsidize rural telecommunications. USF/RUS is not and was not earmarked specifically for broadband. Back as far as 1994 many in Congress were proposing some subsidies for a “broadband like” network as part of what ultimately became part of the1996 telecom reform legislation. The RBOCs got access to the long distance market in exchange for opening up their local networks to competitors (CLECs). This continued until the meltdown of the early 2000s, the financial troubles of many CLECs and subsequent changes to the rules by the FCC under the Bush Administration. None of this was or could have been predicted by anyone (even you) and the ramifications of government subsidies for broadband on top of the regulations of 1996 would have created even more perverse market forces.It’s great that you expected to have 50Mbps service, but to naively assume that government subsidies alone would make that happen shows a naivete that if nothing else is charming.
A) they are oligopolies.B) oligopolies do cause some action problems that are well studied. Not impossible to overcome, but one of things we do try to avoid in this country in our studies in the social sciences is how to not use violence.C)It is a dangerous concept. We don’t and shouldn’t regulate for that reason. We should regulate for transparency and balance of power reasons so that smaller actors and bigger actors have a more even playing field when they have to enter the market. Otherwise you will end up with problems like shoddy medication, not knowing that your toys are made of lead paints (and if they can be recalled or not and to where?), etc. All of this provides a measure of safety to any actor in a market- which in some senses makes it freer- since it empowers smaller actors to make a fair trade with a larger actor on much more equal terms than could have been provided without regulation.That’s a pretty good argument for net neutrality. We want people to have equal access to information under the law so they have freedom to access markets as they see fit because it is their business, not yours not mine, and perhaps not the government (to a point, there are enough marginal cases to become interesting here)
“but we don’t and won’t have that for a long time to come.”you’re right, but only because that’s your attitude.
It’s always amazing how old industries refuse to embrace innovation. Instead of leverage their advantage in yesterday’s market to gain the new one, they freeze, addicted to the easy income narcotics. Finally, when it’s too late, they ask for unfair government regulations. Since the Mississippi’s steam boats, they never learn. Breaking net neutrality would be a terrible win to mediocrity.
Well said. And true. The big companies that can leverage their strength, don’t as its not in their DNA. The small companies that can’t possibly grow and win, do.Mediocrity won’t win. I’m an optimistic and believe in the strength of these conversations to drive the dinosaurs into submission.
This is the thesis of “The Innovator’s Dilemma,” which argues that all (originally) innovative companies evolve through a maturation process that at some point requires them to become better operators. The old “founder’s syndrome” issue, by which companies recognized that, at some point, you had to bring in grown-ups with operating skills and experience, seems baked into the maturation curve. Why would people who have been hired to maximize the profitability of complex, perhaps global, existing operations be expected to want to shitcan those assets in favor of something unproven (innovative)? That’s neither their DNA nor their charter.This argues in favor of greater “intrapreneurship.” The American Heritage Dictionary defines “intrapreneur” as, “A person within a large corporation who takes direct responsibility for turning an idea into a profitable finished product through assertive risk-taking and innovation”. Often it seems that this 1980s concept has fallen out of favor, with fewer companies chartering skunk works or other autonomous units to pursue innovation independent of the smothering operating culture of the mature parent organization.
This is amusing, it really is.So we don’t have formal net neutrality laws today, and yet Google and Facebook and a million other things were created and in fact do exist.So what problem are you arguing that exists again?
Hehe. Much like the bill of rights, we don’t need legislation to give us rights. The presence of specific rights rules out what we haven’t thought of yet.
When you die, if the next place you go has a “BILL OF RIGHTS” on the wall, you’re in hell. Only in a place ruled by flawed men is such a document necessary.
the carriers want to restrict what applications run on their networks. this fight is about making that illegal.
why does that have to be illegal? why do we need a law that says that. haven’t we prevented them from doing this up until now? I’m always skeptical about getting legislation in place because god knows the lobbying and riders that would go in on a bill like that.
Because they have a history of doing precisely that, from Comcast performing a DOS attack on BitTorrent to AT&T claiming that attaching a wireless router was a criminal violation.Fiber-to-the-home (FTTH) should be net neutral because it is a monopoly or duopoly in almost every location in the U.S.
Once monopolies have monopolies, they work hard to keep them, and to extract as much cash as possible from their captive audience.Read up on the history of the answering machine, for example. AT&T fought vigorously against it, claiming that other people hooking up devices to the phone lines would inevitably damage the network and lead to the death of telephone linemen around the country. Or look at their vigorous fight against alternate long-distance carriers.It would be better if we just kept their monopoly power in check, but unless we are willing to break up AT&T and Comcast, then mandating net neutrality is the next best thing.
Ok, ok. I give up. all i’m saying is the law should be specific andshouldn’t bundled it with other regulations.
They never anticipated just how media-rich the web would become – and will increasingly so …http://www.economist.com/da…Just seeking justification to claim an increased share of the new revenues from the media-rich web?
OPEN WEB = FREE SPEECH
Ability for a carrier to restrict content on his/her pipe = Free SpeechMandate from government that carrier must carry all forms of content equally = violation of free speech.
Giving AT&T the power to filter out content they don’t like is free speech?
Absolutely. The ability of private persons (and therefore their organizations) to filter speech unhindered by the government is central to the concept.What’s next? Radio station must allow all viewpoints? Satellite TV provider must carry the KKK channel?I’m amazed what power people will cede to the government simply because it’s current position is agreeable to them.
keep preaching it bro. liberty will prevail!!!!
Greater restrictions begets craftier tunnels. Silly to think that provider focused soley on becomig a dumb pipe wouldn’t arise to crush the competition. Maybe not immediately, but it’ll happen fast with (dynamic) encrypted protocols. You can’t censor what you can’t see.
$113.90 is what comcast gets from me every month. All I want is highspeed internet and NBA games. Because Comcast owns the Celtics rights I do not have the ‘choice’ to subscribe to competing service providers, and i have to pay for an over-bloated TV package even though the TV only goes on for the games. What pisses me off is that this is not an oversight or something, this is comcast’s strategy….comcast knows people like the local sports teams and buys the rights to lock you into to everything from them. I feel owned.When the provider owns the content…..we’re all screwed.I’m all for free market but these companies were granted special rights to be in the position they are in now. So they can’t yell the free market mantra now.
At least you get to see the games. I’m a Celtics fan in NYC. :-
at least you can talk trash to knicks fans :)the irony is, it’s better to be cheering for an out of town team. you can just get NBA Broadband over your internet connection and throw the whole TV package in the garbage. i did this when i lived in europe; saved money and got every NBA game. local blackouts prevent me from doing that in boston if i want to follow the celts. double-irony. thanks comcast.+1 fred. this would enable competition and a new market for slicing everything into on-demand. i only want NBA and internet, and there is no market to address me as a customer currently.
You’d think Comcast would break it into regions -‘buy the “Boston Package” and you get Celtics, Sox, Patriots, Bruins and hey we’ll even throw in the New England Revolution. $x to add BU, BC, Harvard, NE.’
i wish there was a compulsory paid license of video content to all comes who want to provide it to end users
Actually given the history of AT&T and Bell Labs track record of innovation, they would have created Google…. but failed to bring it to market or commercialize it anyway.
that’s so true
I see your point and agree completely, but At&t and Comcast don’t have the forward thought or innovative culture required to build companies like Google or Facebook. At&t and Comcast are both stuck between new world innovation and old school business practices.Any attempt to control the programming by a carrier will be met with harsh response by customers. I’m a customer of both At&t and Comcast and any attempt to control my content will result in an immediate cancellation. At&t, Comcast and other ISPs would be nuts to take this approach. The consumer will find a way around it and seek the open Internet provider.
Someone remarked above about all off Bell Labs contributions such as Unix and C programming. While they may not be forward thinking now, it is within their ability to foster the right kind of innovation (though they’ll have to get the suits in charge out of the way to let it through perhaps). 😉
Right on! I re-posted here: http://gigsby.com/giglog/ne…Verizon, AT&T and others – and their lobbyists- are trying to push two sensitive buttons to make people sceptical about Net Neutrality:(1) If we are not let throttle excessive data, we will have to charge the users more(2) Government regulation is a bad thingWell, I say to them: scale up your networks to meet the current data traffic demand first. If you must, increase your prices to pay for your capital expenses but remember, you will do it at your own competitive risk.As for the regulation scare: This is a right concern put out of context. In this case, the battle is not between freedom of choice vs government regulation. It is the FCC making sure that the Telcos themselves don’t regulate the quality and quantity of user access to Internet services.And finally, AT&T is already offloading large amount of its iPhone data traffic to anonymous WiFi hotspots and enjoying government subsidies in rural or small town areas they serve so when they talk of “freeloaders”, it sounds ironic at best.
DIdn’t AT&T potentially screw up Unix many, many moons ago? Just a distant memory from my early Unix days but, regardless of whether memory serves me rightly or wrongly regarding that, it beggars belief that the FCC will make the wrong call on this, surely?
Fred,I respectfully disagree. If you analyze this debate from the perspective of free commerce, the net neutrality position amounts to the first step of a modern day nationalization or taking of a private asset.As a mob forms at the gates of a power plant ready to take it, the consequences of their actions appear so distant and so remote that they don’t compare to the prospect of free electricity. However, we all understand why it doesn’t make sense to nationalize physical infrastructure as it impedes future investment and therefore sacrifices future prosperity at the cost of a temporary gain. While the names have changed, this is the crux of the economics debate at the center of the net neutrality.One of the most important things to understand is that a net neutrality policy represents a CHANGE in the status quo. Net-neutrality proponents would have you believe the opposite: that legislated net neutrality is something that exists and that the carriers are seeking its elimination. This isn’t the case. Full stop. I hereby object to the title of your post since the existing system ACTUALLY DID create Google!What has kept the carriers from behaving in the alarming self-serving manner that you worry about? The answer, quite obviously, is Competition. This is free-market capitalism at work. If one carrier slows down access to YouTube or Hulu and another doesn’t, consumers will vote with their feet. Isn’t AT&T the monolithic carrier that is losing iPhone customers in droves due to complaints about network quality? If AT&T doesn’t fix their network, they will lose business to the others. This is the system at work.You might ask, if there is a de-facto policy of net neutrality at work (created from competition in the marketplace) what is the harm of codifying it in the form of legislation? The answer to this is simple: because we don’t know. We don’t know what effects this is going to have on the marketplace. While I don’t think you appreciate it, it is easy to see many ways in which this policy might actually impede innovation. Let’s explore:Say there is a game that everyone wants to play but it requires substantially faster latency that what is currently available in the WAN. Nintendo approaches an ISP and the ISP agrees to split the cost of the network upgrade with the service provider. They upgrade the network and the game is a hit. The consumer wins. Without this cost-sharing, the network upgrade might not have occurred. Net-neutrality wants to eliminate categorically the prospect of such cost-sharing. While this example isn’t remotely perfect, the point is that we don’t know and that history has shows that fair competition is a bettor governor than public policy. As a VC, you embrace this principal in everything you do.As you know, there is an alternative option to this free-market competitive system, it is called a utility and it is used elsewhere in our economy. Judge Greene decided in 1984 our nation would be best served by a competitive telco marketplace and this decision (and subsequent 1996 telecoms act) spawned massive investment into the broadband infrastructure. Net neutrality would be the first step in taking these systems back towards a utility. Do we really think that a utility will serve and innovate better that free market competition?Google is no innocent bystander here and it is foolish to think that they are acting in anyone’s best interest other than their own. As the owner of the steel plant who encourages the rioters at the power plant, they want free power. Boxee is no different. History has proven that what they should be worried about is that the steel plant could be next.
there is little to no competition on the last mile. that’s because these carriers operate goverment given monopolies and always have
Fred, sorry to disagree with you repeatedly in your own house. The FCC’s own data shows that 90%+ of the population has the option of at least two broadband providers. Additionally, with the advent of mobile broadband, this introduces four more players into the marketplace.Between Suffolk county and New York, I would wager a bet that you have at competitive options in both locations before factoring in satellite and mobile alternativesIt wouldn’t be right to say that the system doesn’t promote competitive new entry in the last mile given FIOS, Clearwire, Uverse etc.
Two broadband providers isn’t enough to provide a reasonable marketplace; you just get oligopoly.The most relevant example is the studies of post-breakup phone service pricing. With one player in a market, prices were high. With two, prices dropped a little, with the leader setting a benchmark and the other guy coming in a bit lower. It was only with three or more competitors that you got an interesting mix of options and pricing, and it got better the more equal the market share got.For most consumers, the current broadband market is mainly the dance of a small number of monopoly-funded players who are spending a lot of money to buy market share, knowing that the can afford to drive any fair competition to the margins, where they will eventually go out of business. Why? Because long term, they want to get back to their business of extracting monopoly rents.
what does “monopoly-funded” mean? There are no monopolies in Telecoms anymore. that ended in 1984.If you have any question about the competition between wireless and wireline services, you need only acquaint yourself with the 10% annual decline in landline circuits. It’s not as if these people are no longer using phones…or is that what you thought?
Both the cable and land-line companies still extract substantial rents from current or previous monopoly or oligopoly market positions. That those previous monopolies are under threat from new technology is precisely why those companies are so eager to establish new oligopoly positions: they’re not very good at innovation or competition, and would rather get back to a business model they’re comfortable with.
On the flip side of this issue, do you believe it’s acceptable for a content owner to restrict which ISP can deliver it’s content? This is happening today with ESPN360 and could lead to a video-like business model for content owners. The ISPs are required to pay ESPN on a per broadband subscriber basis much like their video content. If your ISP doesn’t buy the ESPN360 programming, you can’t pay them directly for access.Why don’t we have cable neutrality? In many cases, (FIOS, U-verse) the video is delivered via IP. It’s the same pipe as the internet, just different content. The reason is 5 media companies control over 90% of the content. This is the same reason we can’t offer a la carte programming for the channels you want.We (small, rural cable/telco) made the investment to build our cable network and should own the pipes. We are obligated to our customer to deliver the quality of service in our agreement with them. That could mean managing traffic for some customers at some point in the future. If we aren’t serving our customer by delivering the internet as they want it (speed, content, volume of data), they should move to a provider who does.I can see an argument for net neutrality for subsidized networks where “taxes” built the networks (or there was a federally regulated monopoly). Networks built with free market-based investments should be allowed to own and control their pipes.
i do not believe that is right either. as i said in a prior comment to this post, i believe there should be a compulsory paid license for video content to any service that wants to deliver it to an end user
“And it is that elegantly layered architecture that begat Google, Skype, Facebook, and so very much more.”What I find most interesting about this line and the end of the first paragraph about platforms that are going to really revolutionize our era is that you didn’t include Twitter in the bunch. I don’t think I would have either.
the voices being heard are the organizations that have a hose of cash coupled to the backside of the likes of the delectable feinstein and her merry band of crooks.
Fred,Thanks for putting this post together and getting some of us involved. However, filing comments with the FCC is not that straightforward so I put together a quick tutorial that might help people. It’s in the first part of the following post: http://www.tnl.net/blog/201…
thanks. that’s very helpful
Companies should not be in charge of what runs through the pipes. Why, they are corporations with a bottom line of profit, not innovation , not forward thinking attitudes. If the companies were about innovation, like @fredwilson said, they would have created skype and the many obvious evolvements in the industry….
I had a good comment for this, but it became so long I turned it into a blog post. It’s a story for Joe Kraus that perfectly exemplifies how AT&T or Verizon could never have built Google. http://thegongshow.tumblr.c…
I keep thinking in the back of my mind: It is not nearly this simple.One: Most people are passive consumers of something. Despite this, that passive consumption could be seen as an active choice of some power over us, or our lack of care, or unsurity, of what to do about that power over us.Two: Being a behemoth is not necessarily a good thing. Remember, small means agility, and it means also an ability when acting en mass with other small actors to react faster in a network.Three: The arguments about free market vs regulation seem to oddly framed. It’s like trying to say we should get rid of the FDC because the free market will sort of health problems. In turn, small actors with speed can actually overpower a large actor. The way small and big actors work in spheres like this create some interesting situations. It is not purely a monopoly of power in a sphere like this through an oligopoly- true oligopolies are still limited by the fact they are run by the same sort of humans that we are. They are in turn bound by the structure of the oligoply in which they have to make corporate decisions. meanwhile, small is small. Both situations are hindering, and regulators are supposed to balance the choices that these sorts of actors make so that those who will not or unable to make choices have some more fluid ability to navigate the world around them. Regulations are not just for you, they are really for the broad public who need to have equal access under the law (to the law) and the only way to do that- is to provide regulation before one even encounters the courts.Beware of your own power here. The fact that you come here implies that you can act and that you are aware enough to have choice. So what if someone large cannot make Google? That is not how power acts nor reacts in this sphere. You may bring down this system not through the FCC, but instead through some other act of choice that was done.No one is stopping anyone here from coming up with a novel way of getting around the problem without the FCC… or with the FCC as the matter may be.
More people ought to be looking at the recent cable channel/cable company negotiations as the best possible example of what would happen without Neturality. In the same way that the annual standoffs between, say, the Food Network and Cablevision or Time Warner or FOX, are embarrassing and stupid, would we want to have our limited choice of ISPs fighting with our favorite web sites, denying us YouTube and Netflix while they try to get paid?
Actually you have it backwards. In your example, the content holders (networks) denied the providers (cable cos) content until they paid. The Time Warner/Fox issue was for free broadcast television for which Fox wants to be paid (retransmission fees). What could happen (and already is happening with ESPN360) is the websites would deny content to ISPs until the ISPs paid.
The capitalist jingoism is frightening. Remember that the free market is a means to an end, which is the utilitarian goal of “the greatest good for the greatest number”. When capitalism appears not to support the goal greatest good for the greatest number, we as a nation are free to abandon it. And we often do, for good or for ill. So let’s put ideology aside and worry about what’s actually best for the nation.I am strongly for net neutrality because I am against imposing more complexity on my life, and on the lives of others. Complexity of contract *always* favors the enforcing party. If the contract complexity is high enough, it is impossible to accurately audit or budget. This is happening to the consumer in many areas, two important examples being long, involved consumer credit contracts, and time-dependent utility metering. Adding content-dependent utility metering to the mix only adds to that complexity, and is therefore worth opposing.I want to lead a life where I find my obligations easy to understand and easy to meet. And I will support legislation that achieves this goal, regardless of apparent ideology.(And, personally, I believe that this sort of ruling will, ironically, create a far better marketplace.)
If you read the Preamble to the US Constitution, you’ll notice that capitalism is not mentioned. However, Justice, Traquility, defense, and general Welfare is:”We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America.”
yes, but Locke, Hobbes, and Rousseau, the basis of our Constitution and political thought all bring up contract theory. I mean the government is formed from contract- and there are legitimate questions if rights come before the contract or from the contract itself. We’re a conception of a Lockean state, Rights come before the contract, the contract enforces them so that people do not live in fear. On thier own, people will do the right thing.We should therefore recognize that the argument of capitalism, to enter contract, is legitimate under this read. It is why the federal government has the right to regulate interstate commerce under Article I, Section 8, Clause 3.
Contract theory needs to be updated for the times. Computers allow the complexity of contracts to increase without limit. Right now, consumers are given the high entropy, non-executable, obfuscated version of the contract (dead tree plus legalese), and expected to comply without error. This is neither fair, nor reasonable, and it’s a problem that Locke, Hobbes, and Rousseau never had to deal with. Back in their time, enforcement scaled with volume: that is no longer the case.Net neutrality excites me as the first tacit acknowledgement of this reality.
The social contract has actual contracts flow from them. A good overview actually does appear on wikipedia here. You’ll see how the modern conception of the legal contract flows from the social contract.If you are furthered concerned about actors and their flow of power once in a social contract in in place and its relationship to the Internet, I suggest first taking a look at Foucault and then Manuel Castells. I warn you this is not easy reading by any stretch. He deals with the complexity/simplicty issue by pointing out that social actors in a network sphere have to resolve multiple identities and to multiple spheres of power: including within the realm of governmental power, one which resides outside the authority of the nation-state to an “international realm” and a “local realm” because of effective communication norms. However nation-state has regulatory authority and has to help negotiate these terms and structures, which is why large governments seem to act inauthenticity on behalf of the will of their people, too cumbersome…well I’m in the middle of reading his Communication Power and I need to sort of some of his arguments.
I forgot Article 1 section 10 clause 1 as well. States may not impair contracts.
Why stop reading there? LOLThe preamble is saying “here is what we wish to accomplish”….the MEAT of the Constitution deals with HOW that is accomplished…through the strict limitation of Federal Government power and influence and the protection of theliberty of the individual, of which private property (and the pursuit and protection thereof) is a central component.One must merely glance over the Federalist papers to understand— that reading the preamble as if it is a blank check for the federal government to impose its will “for the greater good” is the EXACT OPPOSITE of the intent the constitution and our founding fathers.
Thanks Fred for your post and calling attention to this topic eloquently. I am one of two entrepreneurs invited to present at this FCC workshop in Boston on Wednesday. My powerpoint presentation, all 9 pages of it, is available at http://www.docstoc.com/docs/22068922/FCC-Net-Ne…. As someone who’s built one e-commerce internet start-up through a succesful exit, and now as CEO of a mobile application developer (Skyfire), I’ve seen first hand the barriers to innovation and competition that exist on the “mobile internet” that entrepreneurs and inventors never face on the desktop internet. I cite 6-8 examples in my presentation.As to the 45 postings below in back and forth zaniness between the “regulation never works Ayn Rand crowd” (gee, that deregulation of financial markets worked really well over the last decade, huh?) and the telecom historians… I’d just point out that the FCC proposal is mainly around Transparency and Non-Discrimination as they affect applications, and does call for reasonable network management to be a balance. So Andy’s example is actually silly. An ISP that transparently advertised the option to consumers to turn on filters for certain kinds of content would be fine. The practices that are abusive are the ones that happen in secret, all the time, where oligopolistic network carriers throttle certain types of files, block random ports on mobile phones, or weigh offering big publishers like YouTube privileged co-location across their networks. These are practices that bias against fair competition and new entrants.Similarly, it’s quite common for practices on mobile smartphones that would be highly controversial on desktop computers. Imagine if Dell or HP told consumers that they couldn’t load any application that “duplicated” an application pre-loaded on the computer! Or that they couldn’t set Firefox or Chrome as a default browser, only IE. It would be unthinkable. But Apple has exactly such rules on the relatively closed iPhone, for instance. Unfortunately, the FCC is probably unlikely to look at handset makers, but focus only on telcos, in this rulemaking.More at the workshop tomorrow.
What we need are hard and fast rules about blocking and disrupting access. Broadband is not a cable network whereby we get the channel lineup that the carrier negotiates.Having an open Internet is vital to free speech, innovation, and our economy. It is the Linchpin to the economy (just ask Seth Godin).
Count me in for helping with this.
Vertical integration has been the problem in many industries in our past as a nation. In an era where Choice is the dominant theme as it relates to content consumption, the enemy is vertical integration because it attempts to thwart competition by creating scarcity that would not exist without erecting false barriers supporting these practices.It is no stretch to call this the era of Choice. Still, complexity with all aspects of the digital universe demands that we clarify ‘what really matters?’Choice is the dominant social trend as it relates to content. Access precedes Choice. Allowing Cablevision to own the pipe, the venues, and the finished content too, we are effectively regulating against the very innovation that we need more of today, and any hope of discovering the real equilibrium in pricing for content. The broadcast era is over.Media is a higher order social tool. Today, the social theme is about how we share ideas….not just receive them as we did in the last era. Incremental innovation begins with unfettered and unbundled access to our latest and greatest sharing tool.The surprising nature of the innovation realized in the past decade will again surprise us in the next decade if we let people have their Choice. I submit that even Google will see their GM, Chrysler, Plymouth, Renault, Fiat, Toyota, Honda, and others come along as we really use Choice to make us better and better at everything we do.Everything in the media universe right now boils down to businesses searching for ways to erect the missing barriers to entry that previously existed. This issue is a symptom that something good can keep happening.
@egoboss: Reading “Economics backs net neutrality, say researchers” on Ensembli: http://ensembli.com/stories…
This may be off topic, but another interesting question to consider, should AT&T and Comcast try to create the next Google? As an investor, I say “no”.How much value has Kodak destroyed trying to become a player in digital photography? It’s not a matter of inventing technology – they invented digital sensors in the 70’s. However the technology can be so disruptive that the value chain and activities that the company participate in simply no longer function.Large companies like this are are designed to maximize the profit they can extract from their markets, and they generate significant shareholder value doing this. Michael Porter’s Activity System theory says that these companies build communications channels, processes, and activities that reinforce one another and allow it effectively carry out it’s activities.It’s a radical notion, but once technology significantly disrupts a market, the best activity for the owners and shareholders is often to maximize profit in the declining market.
I just watched this video by Lawrence Lessig, Law Professor and Board member of the Creative Commons, and something really stood out to me, here’s my take:”A Tiger has a nature no matter how much activists show off cute pictures of cub sized tigers… Comcast, ATT, even Google… have a nature and a goal to make value for their shareholders. Would you trust your child alone with a tiger? Would you trust these companies to make good decisions to further innovate and grow the internet?”I’m all for net neutrality because innovation can’t be begotten under people or companies who don’t want change…. change is inevitable and in America we either change to adopt the most innovative practices or eventually… we will fall behind. We can’t put a stranglehold on our creativity or our innovation. If we do, we will have lost what makes America a launchpad for new technologies, success and the American dream.You can watch the Lessig video here: http://popd.it/XZQ
“It’s in my nature.” Lots of wisdom there, Glenn. Reminds us of the frog & scorpion story.
Er, I respectfully disagree. During the mid-nineties I worked for TCI Technology Ventures, the VC arm of the then-largest cable TV operator, which was ultimately acquired by AT&T and then Comcast. My boss, former Intel engineer Bruce Ravenel, was a big part of launching Netscape and wasn’t afraid of swinging for the fences – witness Sprint PCS, @Home, etc. There were a lot of things to do and sometimes it was better to get out of the entrepreneurs’ way and let a thousand flowers bloom.One of the examples I am most proud of is the cable industry’s leadership in pooling MPEG patents, at the time owned by a disparate group of American and Japanese corporations, and quite frankly hindering any kind of innovation. These patents, now managed by Denver-based MPEG-LA, were essential in the launch of iTunes and all of its derivative products. This decision to open up the architecture and encourage innovation was not an isolated one.There are an awful lot of misconceptions about those early days, such as the “cluelessness” of Microsoft – who I argue grokked the Internet better than most (witness Winsock) but made the fatal assumption that Office would be the dominant content-authoring tool, dismissing HTML as a redux of Alan Ashton’s WordPerfect.I agree that vigilance is needed – not just Internet access providers, but with the FCC as well as foreign actors. I am challenged by the FCC’s assertions that we lack diversity in content ownership, especially with the sheer diversity of bloggers and sea changes in the economics of content. ICANN is now international, and with foreign involvement I believe sovereignty will soon play a role in how privacy is managed. Mostly, I am worried that conventional viewpoints on issues like paid content and sales tax are so ingrained as to take on quasi-religious tones.
very plausible that they have the resources to have done that, although in the real world, they just didn’t.
Comcast built that network infrastructure with investor (not taxpayer) money and owns that asset. What you are recommending is similar to the government requiring WalMart to share it’s logistics system with Target to bring more choice and competition. It doesn’t and shouldn’t work that way. You have the right to choose Comcast or DSL. You also probably have (or will soon have) the right to a wireless broadband carrier. Check around. They are all over the place.
Gregg, I understand your point, and while public funding created the early internet, it’s backbone is now maintained in the US by private companies who interconnect. But Walmart-Target is not an accurate analogy. Comcast or other ISP’s sell connection to the whole network. Comcast doesn’t have its own internet (AOL tried that and failed… the value is connecting to everyone) like Walmart its own stores. They provide a pipe that reaches everyone’s media, stores, applications, and the like, both Target and Walmart and Sears and Amazon, if you will. The deepest part of the FCC rulemaking is just Transparency– declare what you throttle or block, for network management, don’t do it in secret to atomized consumers who can’t always detect what’s happening without great effort. And don’t do it in a discriminatory way, say favoring Target but punishing TJ Maxx because they aren’t paying under the table, or don’t have common ownership, or because TJ Maxx isn’t a Comcast reseller, etc.
No question the Walmart-Target analogy is weak, but Charlie’s desire is to have the government allow 3rd parties to sell services (or service as it will all be IP-based soon) over networks they do not own. The net neutrality discussion to me is very different from that. I agree with transparency and we will strive to be as transparent as possible to our customers.To Charlie’s point about competition, Walmart is the only option in many of these rural communities. It would be ludicrous to argue for them to share their logistics network to increase competition.