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.


Comments (Archived):

  1. Anne Libby

    I would guess that we still have legislators who have never (personally) opened an email account.

    1. JimHirshfield

      That’s the speed of gov’t.

      1. Anne Libby

        And to be clear (and to @andyswan:disqus ‘s point elsewhere) I don’t think that our legislators are “stupid.” It takes intelligence and diligence to be elected to office.I am saying that the way that my email is handled by my (Dem) legislators shows that we live in different universes.If Chuck Schumer — for example — handled his own email, certainly his office wouldn’t think it’s appropriate to respond to my email so many months after receiving it, that I can’t even remember what I wrote to him about!Nor do I trust that the bulk of them understand why this is an important issue for small businesses like mine.

        1. Susan Rubinsky

          Tom Foely’s governor’s campaign in CT wrote me an email about his concession last week a couple of months after I repeatedly sent emails to them requesting policy statements on various issues –such as healthcare, transportation/transit, economic, etc — that were not published on his website. Never did receive the responses to my questions, just last week’s blanket email.

          1. Anne Libby

            It is appalling. And it’s pervasive.(Then, there are the offices that have voicemail answer their phones, and never return calls. Ahem, Sen. Gillibrand.)

          2. LE

            Then, there are the offices that have voicemail answer their phones, and never return calls. Ahem, Sen. Gillibrand.Having staff answer their phones would cost money. Where does that money come from? I’m sure space permitting they would love to have more staff.I don’t think adding something like that creates anymore than “caring theater”.

          3. Matt Zagaja

            For specific constituent issues they can do things about like trouble with securing social security or veterans benefits or expediting a passport they’ll be able to respond and help fairly quickly. As far as expressing opinions on general issues its usually best to send an e-mail, make sure to mention a specific bill and be clear whether you support or oppose it in the opening paragraph. This data is marked into a database system that the congressperson usually refers to when trying to gauge how their district feels or to note that people in a specific interest group care about the issue and might be active in the district. A form letter is usually developed by staff to send to people that write about the bill/issue. If it’s an issue the member hasn’t heard about before the time delay is going to be necessary so staff can research and appropriately formulate a position.I think the thing a lot of people don’t get is that their letters are not going to cause a Congressperson to change their position on abortions or gun rights. However hearing from people on a new issue like net neutrality can help them understand the sentiment of their district and provide them with material to formulate a position.

          4. Swift2

            And they will formulate a position as soon as the election is over and they whine about turnout. You have to give people something to vote FOR.

          5. JimHirshfield


          6. Matt Zagaja

            Campaign e-mail strategies are still in the dark ages. Lots of carpet bombing, not a whole lot of smart bombs. Obama and the DNC have done some interesting things with outbound but only look for signal in things like click throughs, etc. and aren’t really setup to handle inbound well. I think the tools in NationBuilder are a good step in the right direction on this front but many campaigns don’t really prioritize responding to the inbound (unless you’re a donor or volunteer) or really don’t want to put out policy statements.

          7. Susan Rubinsky

            Oh absolutely. I suspected they didn’t want to release policy statements. Though for the life of me I can’t understand how any politician could run a successful campaign without policy statements.

          8. Swift2

            The problems of data will be solved, eventually, but the worst problem comes if what the average support gets is a massive, poorly-managed quest for funds. People at the midterm need to be encouraged. One e-mail comes in saying, “Disaster!” and “Unprecedented wins!” and the next is “Villainous Billionaires Strike Again.” And they all end up with me, a very modest donor because of my circumstances, getting 250 e-mails every day before I get to the friends — wait, friends don’t write e-mails anymore, do they? I was getting more political mail than spam. All to get blood from a stone. There has to be a medium developed, a way that a party exists to the party member. Hopefully, the Internet could facilitate grassroots efforts more, and get more opinion and insight from the members.

          9. Matt Zagaja

            Best thing you can do is filter those e-mails to the abyss. They consistently test and re-test subject lines and content so if you open the scary e-mails it just encourages them. If you hold your donation until you get a more policy oriented e-mail that’s noticed as well. E-mail volume is something that is a constant debate, the experiments the Obama campaign did strongly suggest that campaigns end up losing if they don’t keep up the volume but the chief data scientist at MailChimp believes there is an inflection point where you get decay of interaction with the e-mail from too much.Also the Analyst Institute has done studies that suggest e-mail has no impact on whether or not people vote, so it’s only used to disseminate message, raise money, or recruit volunteers.The behavior of the general public in regards to e-mail seems to be they just kind of dip into it as a stream (a la twitter) and they are not really managing it. Thus the battle for your attention pushes forward in this rather annoying way.

        2. Matt Zagaja

          Most correspondence is handled by overworked and under resourced staff using decrepit software from Lockheed Martin. I bet some good money exists to be made for the first person to develop a new inbound constituent services handling program (zendesk for politicians?) that can also use big data analysis tools and machine learning to spot trends and develop natural language summaries the way Narrative Science does with Quill Engage. Maybe best to develop and try selling to city councils or state legislatures to prove the concept (and go through a less hellish procurement process) before moving on to Congress.

          1. Anne Libby

            Thanks, Matt.

        3. Swift2

          The reason it takes them so long to respond is because a) the Senator spends all his time raising money, and b) tailoring his answers to please his funders.

          1. Anne Libby

            Oh, I see it as a process problem. Our emails come at them like water from a firehose. They have no apparent filters or intelligent (timely) autoresponses.The first time I saw an autoresponder was in the mid-90s, when I was evangelizing the very first stages of web/email within a large financial institution. It seemed like a miracle.This miracle is somehow not yet consistently possible in congressional offices.

        4. Mike O'Horo

          It definitely requires diligence to get elected, but intelligence? There’s too much evidence to the contrary. When you look at video of some House and Senate members’ comments about rape, climate science, etc., you have to conclude that this is the product of more than mere ignorance; it smacks of low wattage.

          1. Anne Libby

            Or a wily intelligence that’s willing to pander to the lowest common denominator in a branding effort…

      2. Swift2

        Elect people who have a plan for the future, and who understand the past. That’s the speed of a government polluted by Citizens United.

    2. LE

      I would guess that we still have legislators who have never (personally) opened an email account.Is that really an efficient system? Do you think it’s a good use of a legislators time to sit there and read emails from “my mom complaining about some issue that is important to her”? Vs. having staff read and summarize those emails?Do you think the heads of major or minor corporations (or non profits) spend time personally reading all or even a majority of the email addressed to them? [1] Sure from time to time but definitely not hours per day, every day.[1] I had an issue with the local gas utility. They failed to turn on the gas in a property that I owned and had a screwup in their new scheduling system. So I sent a fax to the CEO explaining that if someone didn’t come out and fix the issue within a day I was going to do several things (including contacting their investors since I saw the problem as a management problem (which I discovered it was)). One day later nobody had contacted me. So I sent the fax again with a cover note promising a few more things. Next thing I know someone contacted me and they came out and fixed the problem. I never heard from the CEO (and didn’t expect to). Most likely his secretary (who the 2nd fax was addressed to) decided to take action when I made some reference to the fact that she would look bad as well if the issue wasn’t fixed.

      1. Tyler Hayes

        If Steve Jobs could take the time to respond to a few emails now and then, I’m sure Ted Cruz can.

        1. LE

          And the point of responding to a few emails now and then is? What? Sounds like something that someone does for PR purposes. Steve of course may have very well read many more emails than he ever answered. (I knew someone would mention Steve but forgot to put that in my comment prophylacticly)To me that smacks of the “dog and pony show”. Reminds me of when we had bankers visiting for loans back in the 80’s. And we gave them the dog and pony show showing them traces of things and lightly dropping hints about how we were so frugal. All planned out for max effect (and it worked). Wasn’t reality though. Just showed we were smart enough to do that (and they fell for it).That said I’m all for not having a layer between you and the customer and knowing exactly what is going on and feeling the pain. There is definitely absolutely a place for that in business.But also keep in mind that according to the law of large numbers and statistics most likely any issue that a company is having will be represented and magnified if they make any contact at all with even a small number of people complaining.Separately, just because Steve Jobs or anyone can find time to do anything (go to Church/Synagogue or call their mom) doesn’t mean that someone else (who in theory has more time) can. I spend more time commenting on AVC than I spend talking to my own mom.

          1. Swift2

            Part of the problem is, we have to be a little less cynical. Was Steve Jobs’ habit of reading e-mails from users, keeping his own e-mail address known a good PR move? Yes! But what letters would he answer? Ones that meshed with the way a lot of people were feeling. His open letter on Flash, his letter on DRM, very good PR because it was sincere. I think he really did have a connection with Apple’s people. He would lay out his position. He would help somebody with a problem.

          2. Anne Libby

            Call your mom!

    3. ShanaC

      if they did they would be more inundated than fred. that would be interesting to watch. We should take away their spam filters too

      1. Anne Libby

        It doesn’t seem that you and @LE heard me; I must not have been clear.I didn’t mean that legislators should provide front line constituent services, themselves.I meant that the people who represent us in these decisions that affect our businesses should have the basic consumer technology skills to open up a Netflix account or use Seamless.Or to understand that their office workflows are messed up, and get them handled in a more effective manner.

        1. ShanaC

          they don’t have to – they are insulated. Totally deinsulating them will give them a different priority set

          1. Anne Libby

            Exactly my point. Too insulated.

        2. Swift2

          I think it is completely reasonable to ask that a representative spend a portion of his work, every day, reading to and responding to constituents’ concerns. The moment you can make a real run for the House without a few million dollars, it can happen.

        3. LE

          I meant that the people who represent us in these decisions that affect our businesses should have the basic consumer technology skills to open up a Netflix account or use Seamless.I agree with that. However there doesn’t appear to be any specific job requirements for any political job (have you ever noticed that?). For example if you read an advertisement in the NY Times for a position at a State University or even some school district you get a very lengthy list of requirements that is quite long and has the kitchen sink included. You have to wonder sometimes who has all those requirement. I do. Yet when running for office there is no check on anyone’s ability. At all. Usually. That has always amazed me but not surprised me since in the end it’s really a beauty contest, right? I mean people elect individuals based on how they speak and what they say, not what they have done or what their real qualifications are.Or to understand that their office workflows are messed up, and get them handled in a more effective manner.Agree once again. But the people electing people (who then complain that those people didn’t do there job) as a whole aren’t smart enough to even buy a car or find the best toaster (without the help of consumer reports) so why would they be able to hire people who actually “understand their office workflows are messed up” (Right?)

  2. Mark Gannon

    It will be interesting to see how the FCC commissioners vote. Because many of them are industry insiders (e.g. Wheeler), they have significant financial incentives to vote against making the Internet a Title II utility.

    1. christopolis

      wrong. a regulated internet is a controlled internet. Ask the too-big -to fail banks. Who love to do the fake outrage while crafting the legislation and rules with regulators and legistlators who they lunch with.

      1. pointsnfigures

        exactly right. Dodd-Frank increased their cost of doing business, but bankrupted there competitors. It’s why Amazon would be in favor of an internet sales tax.

  3. Dave W Baldwin

    Well written Fred. I’m going to link this post with an “@” at Senator Cruz. My suggestion is if anyone else does, be polite. If you tweet at Cruz with verbiage saying he’s an idiot, you only play into his claiming you’re left wing blah blah blah.The other step is to send the informative opinion to your Senator/Rep along with McConnell/Boehner…just be polite.

    1. fredwilson

      I totally agree

  4. Liban Mahamed

    The republican party is taken over by the right wing. They do not want to hear logic. Several Republican house candidates were against vaccination believe it or not. If the 1st Bush ran for office today they would call him a socialist.

    1. Tom Labus

      Or Evolution

    2. JLM

      .Nonsense. The Republican party — credit Reince Preibus here — just ran the table by appealing to the common sense voter. The took the Senate, built a deeper House, swept Governorships, own the Statehouses.It was the most dramatic overhaul in modern American history.How?By sticking to a single issue — the policies of Barack Obama. They did not get wrapped in their underwear about social issues, they just let the President have his way — a vote on his policies. This is the election he wanted and he got it. He does not like the result which is the greatest wholesale repudiation in the history of American electoral politics.It is not very right wing to believe in fiscal responsibility, balanced budgets, deficit reduction, jobs, effective health care and common sense immigration. The results speak for themselves.Now the Republicans better get off their butt and deliver.JLM.

      1. Dave Pinsen

        As Steve Sailer notes here, the Democrats also failed to rally their coalition with appeals based on race (e.g., Ferguson), feminism (e.g., Wendy Davis), etc.:

      2. ErikSchwartz

        Either a mandate,or just a par for the course, typical, year 6, lame duck, low turn out, midterm election.

        1. pointsnfigures

          No, mandate. state legislatures in many states turned Republican. The Maryland Governor is Republican. In Illinois, the Republican governor won every county except one, Cook where the Democratic machine runs basically unopposed and has controlled things for 70 years. Now, let’s see if they can propose sensible stuff and stay away from all the social engineering.

          1. ErikSchwartz

            Hard to call an election where 2/3rds of voters stay home a mandate.

          2. pointsnfigures

            If you buy that excuse, I have swampland in Florida for sale. In virtually all elections, most voters stay home. Rahm Emanuel won the mayor race in Chicago-but I bet less than 33% of the entire population voted. He’s still mayor.Was it a mandate for Democrats in 2006? I’d argue that it was. Since 2006, Dems have lost 90 seats in the House, and the Senate. That’s 20% of the House. They have also lost governor races, and state legislatures. That tells me they are out of step with most of America

          3. Pete Griffiths

            And it does raise the question of whether the US is governable by either party right now.

        2. JLM

          .The Republicans did not win a mandate by any sense of the imagination. The Democrats lost and the Republicans were victorious in the contest between two evils.Make no mistake the Republicans are evil. Until or unless they can make an argument they can, in fact, govern. This is a big open question.As to it being a typical lame duck performance, one could embrace such an explanation if one were to look at the gains in the House but the Senate gains, the Governorships (OMG Illinois, Massachusetts, Maryland, Florida) and the Statehouses are something altogether different.Now, the Republicans have to prove they are different and can govern. Something I am skeptical about.JLM.

          1. ErikSchwartz

            I don’t know the details about most of the governors races other than in Maine (3rd party thwarts again) and Massachusetts (god, who lets Coakley run for ANYTHING).The thing the GOP needs to avoid is the need to suck up to the social conservatives to get nominated in 2016 (which they will be unable to do).Can Reince keep beating down the social tea partiers?

          2. JLM

            .The battle lines on the social issues have been drawn for years. Reince Preibus was brilliant in not letting the social issues — some of which have been settled since the last election — become the BIG issues. The President helped by his absurd utterance that his “policies” were on the ballot — could any Republican pundit have possibly improved on that ill fated comment?The Republicans had better candidates than they did last election — no witches — and they stayed on message, they raised a lot of money, spent it well, had a vastly improved GOTV effort and let Pres Obama and Harry Reid set the agenda.Guess what? Nobody likes the President’s policies and nobody really cares what the Koch brothers do.The tea party is more about economic issues rather than social issues. Witness the actual election.Again, the Republicans have one last test — can they govern?Last point, Harry Reid will rue the day he ever took the nuclear option.JLM.

          3. ErikSchwartz

            “Again, the Republicans have one last test — can they govern?”I doubt it. In fact no one has been able to govern effectively since 1994 when government changed from a cooperative endeavor to Us vs Them.

          4. JLM

            .As a reasonable person, you have to give them the benefit of the doubt. I frankly find no real difference between Mitch McConnell and Harry Reid — two old school professional pols.The issues will not allow “present” as a vote. Russia, nuclear Iran, Middle East, ISIS, economy, immigration are going to be decided the question is whether there will be someone with a hand on the tiller (sailing reference for you, Erik the Sailor).JLM.

          5. ErikSchwartz

            The GOP needs to be in flavor of something. This campaign was just reflexively “against Obama”.This reflexiveness I think is the root of the problem with Ted Cruz’s tweet (I also think twitter is terrible for political discourse because it promotes the soundbite as debate and makes nuance difficult, but that’s a conversation for another day) .

    3. kidmercury

      anti-vax, or at least vax concern and awareness (rather than blindly accepting what you’re told) is a growing trend. what starts as heresy becomes truth in due time. only question is if you’ll be on the vanguard of the movement or a follower who mocks until the majority has seen the truth.

  5. jamesoliverjr

    If the President is for it, Ted Cruz will be against it.

    1. ErikSchwartz

      Yup the merit of ideas are based on where they originated and how they are branded rather than on their actual merits.The dems do it too.

      1. LE

        Old as prostitution it’s known as “you scratch my back and I’ll scratch yours”.

    2. Tyler Hayes

      “Now I respect my opponent, I think he’s a good man. But quite frankly, I agree with everything he just said.”

  6. andyswan

    Ted Cruz knows more about this issue than most of us. The concept that he is ignorant or stupid is filled with political bigotry.His stance is logical and very easy to understand: The Internet has come this far without federal content regulation, and the federal government should not be allowed to get involved now. The government has been shown time and time an to fuck things up through good intentions.You do not need to be an expert on internet infrastructure to be an expert on the long term ramifications of the slippery slope of federal control, which Mr Cruz undeniably is.We do not want a permanent, suffocating solution to a temporary, predicted problem that the marketplace hasn’t had an opportunity to address yet and mainstream consumers aren’t complaining about.The burden of proof here is high and is on those that want to give government control over enforcement of content distribution, pricing and delivery methods for Internet data.There’s nothing gutsy about waiting until after you lose congressional control, and after the last election that matters to you, to bring up the idea of a federal grip on Internet policy. Guts would have been doing this 3 months ago when the telcos were dishing out PAC funds. .

    1. aweissman

      In this case Andy, I think Senator Cruz is mistaken (and he may not have read the President’s actual statement which recommends that the FCC forbear “from rate regulation”)The last mile Title II approach actually is likely to lead to *less* regulation – not more – because it is a bright line rule. Every other approach would require the government/FCC to adjudicate what rates or approaches or slow and fast lanes are reasonable or not. That will lead to lobbying, rulemaking and litigation. So in this case this proposed approach, as Fred says, may be the more conservative one that involves less governmental oversight.

      1. andyswan

        I don’t think he is commenting on a specific proposal, but rather the full concept of allowing the federal government regulatory control over Internet content distribution.The long play is the smart play

        1. fredwilson

          Th long is the wrong play here AndySwan

          1. andyswan

            Well… I can respect you thinking that. And I can disagree. But it’s important to understand that Cruz isn’t commenting on this from the perspective of next year’s ISP pricing options. He’s commenting on this from a decade’s-long perspective of whether or not to grant regulatory and tax control over the internet to the Federal Government.I’m tired of the “he is ignorant/stupid and needs to be educated” nonsense we always have to hear. He’s arguing a different point. A constitutional point. And it’s a very, very valid one.

          2. markslater

            Coming out with a “the president wants to turn the internet in to obamacare” is completely ignorant. Nothing in what he said yesterday suggests anything more than a neadotholic understanding of this issue and the public responded in kind.If – as you say – he has a far more sophisticated understanding of the issue – he might want to think about articulating his position better.

          3. pointsnfigures

            It’s not completely ignorant-he got his point across in 140 characters.

          4. madcapfeline

            I’d also be willing to wager a shiny nickel that he doesn’t write his own tweets.

          5. Steve Anastos

            What if Cruz is commenting from the perspective of: ISPs have a ton of dough and influence, and I need a ton of campaign dough to keep my job? He’s not stupid, but his incentives are not always aligned with ours.

          6. SubstrateUndertow

            Smart vs devious !That seem like a generic problem with elected officials.

          7. madcapfeline

            No, he’s commenting directly from the cue cards that Comcast wrote for him. Also, show me where in the Constitution internet monopolies are discussed. I missed that one in my American Studies class. Also, tossing in the “Obamacare” remark was deliberately polarizing. He’s attempting to use smoke and mirrors to turn this into a partisan issue, in an effort to draw attention away from the fact that the ISPs are bribing Congressmen to do their bidding so that they can double dip, and charge twice as much for the same service.

          8. SubstrateUndertow

            So can you articulate Mr. Cruz’s track record on “the long play” ?Was the government shutdown an example ?

        2. Nick Grossman

          an important idea here — that has failed to take hold — is the difference between “the internet” (all the websites we use) and “access to the internet” (last mile ISP). the idea here is to make sure that “access to the internet” doesn’t choke out / distort “the internet”. so to say this is “regulating the internet” is missing that point, though it’s subtle

          1. pointsnfigures

            agree it’s about the last mile. I’d also point out that when it comes to the internet-we may develop new kinds of delivery that are more efficient than what we have today-and put the telco’s out of business. Tech innovation isn’t static.

      2. Richard

        Does anyone really think that this president or Ted Cruz for that matter, at this time, spent (days weeks or months) deliberating net neutrality?Why can’t we get an honest assessment by the president? How about, ” I had meeting with “name the lobbyist” and they perusaded me. I also had meeting with “name the lobbyist” but they failed to persuade me.

        1. aweissman

          that’s not entirely accurate – in the case of Obama at least he has been commenting and opining on this issue for years

          1. andyswan

            Just waited until after a huge electoral defeat to really bring it up?

          2. madcapfeline

            Where you been? This has been going on for a while now. It’s just been moving at the speed of government, so nothing is actually getting done.

          3. SubstrateUndertow

            What an evil man !It’s not like other political or corporate entities are playing “THAT BIG BAD EVIL” strategic timing game ?

          4. pointsnfigures

            More so because the internet had freedom of speech that he disagreed with. The tell was when Senator Durbin wanted to regulate bloggers and limit their freedom of speech. That trial balloon didn’t float.

        2. Nick Grossman

          it would be pretty incredible, actually, if politicans talked like this

        3. madcapfeline

          Lobbyists only come in when they want to change something, ergo the hefty payouts from the ISPs to Senators like our pal Ted. I don’t know of many lobbyists for the status quo.

        4. SubstrateUndertow

          How much depth is required to comprehend that the the internet is the “MOTHER” of all social utilities !

      3. Nick Grossman

        right — clear, bright line rule means that you don’t need to hire a DC lawyer to represent you to the FCC when you have a dispute.

      4. Rick Mason

        So the free Internet has a bully (Comcast) and the answer is to allow itself to be regulated? The net always routes around problems but how does clipping its wings make it more free? I’m from the government and I’m here to help you.

      5. LE

        In this case Andy, I think Senator Cruz is mistaken (and he may not have read the President’s actual statement which recommends that the FCC forbear “from rate regulation”)It might be a good idea then for “interested parties” to privately correct the record by filing the equivalent of a SCOTUS “friend of the court brief” with Cruz or any other legislator.By privately I mean not to write some patronizing publicly visible piece that rubs salt in the wounds and says “you suck and here is why”. I guess if done correctly it could be public of course.

    2. fredwilson

      So then let’s keep things the way there. Open and free. Unfortunately Ted’s position will lead to the Internet closing down into a walled garden controlled by telcos

      1. andyswan

        Why would consumers not demand a better experience and force ISPs to provide better and better service over time? Why wouldn’t innovators solve the problems better than the government?Show me an historical example where government regulation has delivered a more “open and free” consumer and innovator experience. I mean– this idea comes with a 16% tax right off the jump!You’re asking for Federal intervention to thwart a prediction. Just a few days ago Elon is talking about satellite-internet. I can run Netflix over my phone signal. There is massive competition coming among ISPs…. despite gov’t best efforts to create monopolies.

        1. Antonis Polemitis

          Are you opposed to all common carrier classifications (as a general concept) or do you believe the internet providers are not common carriers?

        2. Tyler Hayes

          HIPAA opened up medical records for hundreds of millions of people.Meaningful Use incentives (HITECH) led to huge innovation in engaging consumers in their healthcare.Also, both of those just started, so there’s 10-100x as much innovation to come.

        3. LE

          Why would consumers not demand a better experience and force ISPs to provide better and better service over time?Switching, even if possible, is not trivial. As long as the service is “just good enough” it becomes a satisficing purchase.Not the same as when you buy your favorite liquor. If you get a bad bottle a few times in a row you may consider switching brands because it’s easy to do so (even if it’s just “good enough”).

        4. Matt Hames

          I live in a place where Time Warner Cable (about to merge with Comcast) is the *only* option for getting on the Internet. So when people claim the free market will win if telcos like Comcast or TWC create fast and slow lanes that consumers don’t want – they are frankly full of shit. The competition ship has sailed in many places in the US, and will continue to sail as Telcos gobble each other up.That is basically the definition of a utility. The federal government will not intervene in the future if TWC is made into a utility. Indeed, the opposite will occur, more infrastructure can be created and entrepreneurs can innovate – like they have been. Slow down lanes and you slow innovation.

          1. christopolis

            Where do you live that is outside a MaBell or regional telco? Making stuff up?

        5. madcapfeline

          “Why would consumers not demand a better experience and force ISPs to provide better and better service over time?” Because the telecoms don’t care. I’ve made demands from Comcast on multiple occasions, and nothing has ever come of it. In most areas, it’s “our service or no service.” “Why innovate and upgrade, when you can spend a mere fraction and buy the Senate Judiciary Commitee? Then we can make double the money by charging double the fees for the same shitty service. And then we can buy more Congressmen instead of updating and upgrading out equipment.” What are we supposed to do, storm the building with torches and pitchforks?

          1. andyswan

            Why don’t you start a better ISP?

          2. bmathes

            Estimates put the up-front capital costs at around $10B, to say nothing of the regulatory hurdles that have been erected as a moat by current oligopolists.

          3. christopolis

            and those same “oligopolists” who affected the current regulatory environment will not be successful in doing the same with proposed regulation? That makes a ton of sense. It didnt work the first time but this time it will because we have hope and faith. Rainbow hugs for everyone

          4. bmathes

            yes, in fact, if we use the same playbook as in the case of breaking up the telco monopolies, it _did_ work. Common Carrier regulation was a resounding success. Remember when you had to worry about the cost of an international phone call? Not anymore.

          5. SubstrateUndertow

            Come on Andy 🙂 you know better !Your just winding us up !

          6. dmeehan

            Net Neutrality would make it easier to start your own ISP.

          7. andyswan

            I don’t think so. There is literally nothing I could do unique to compete. I am disallowed from differentiating my services.

          8. dmeehan

            Completely untrue. It only will prevent you from differentiating your service by means of discrimination. It will encourage differentiation in service that can be provided by smaller, more innovative players — rather than those who use their size and monopoly to “differentiate” by means of artificially withholding services.

          9. ShanaC

            how are you disallowed from differentiating?

          10. andyswan

            It would be illegal for me to start an ISP that offered poor people $5/month unlimited access to text-only content.

          11. dmeehan

            A. I don’t think it wouldB. Who would want that?

          12. andyswan

            People that want to learn instead of stream breaking bad and don’t have $50/month? What’s it matter? Shouldn’t I have the right to try it?

          13. dmeehan

            i think you actually could try it, even under common carrier laws. As long as you weren’t discriminating about which websites you were allowing access to and were stripping out images and video from all sites equally.

          14. andyswan

            I only want to grant access to educational sites and peer-reviewed content. This is part of my competitive advantage

          15. dmeehan

            Well, what your suggesting is sort of like a la carte pricing for cable. The Internet is a wholly different beast.In a world where the reality is that in an _unregulated_ market, ISPs have developed monopolies, I believe the interest of the common good outweighs any right to try whatever half-assed business model you want to propose.

          16. andyswan

            Unregulated monopolies huh? Lol. You guys should get your story straight. I’ve been told several times today that my idea was impossible due to regulators giving monopoly status to telcos

          17. dmeehan

            Poorly regulated. Net neutrality actually brings clarity to regulation – something that is usually beneficial to businesses.

          18. ShanaC

            a few questions:a) how would you be sure that the marketing is based on income and not protected groups (aka, you wouldn’t be repeating redlining, because someone selling you ad space is a racist, however, their actions may lead you open to liability)b)how would you deal with the security of issues of reading what everyone is looking act to make sure it is purely text onlyc) how would you deal with the cost of this from a technology point since adding images and video is actually minimally more expensive if you have to lay your own pipes (situation we are currently in) plus the added technology of packet examination

          19. ShanaC

            at this point, I should call my uncle who I have a very distant relationship to, and ask why he left the ISP business. Basically, reclassification would probably have kept him in it.Note this wasn’t a huge ISP. This is exactly the kind of ISP you keep describing – the currently regulation scheme actually makes it harder to run. Reclassifying would actually make it profitable for small ISPs to exist and overcome churn/steal customers from Comcast. service kept degrading/issues popped up as the industry became more and more of monopoly if you were small, from what I can tell from news reports about said ISP. This is due to the way regulation is/is not structured – there is no way you can afford to upgrade service and stay involved with FCC legal requests and bear marketing and service costs.So if I wanted to start an ISP, I’d actually want to reclassify.

        6. bmathes

          Private coercion, in the case of monopolies, effective local monopolies, and oligopolies prevents competition from solving these problems. Or: I want to switch away from comcast, but I literally have no other choice.The market doesn’t work when a small few (or one) player is the only game in town. Capital-intensive businesses are often an example. Telecommunications have a long history in the US of consolidating power, jacking up prices, and regulatory capture. Happened with Western Union (telegraph), AT&T (phone), and now Comcast/Verizon/AT&T (internet).Pick up a copy of The Master Switch by Tim Wu if you want to read more about what has and hasn’t worked w/ telecom monopoly, regulation, and empires. Common Carrier has worked. It’s a tried-and-true idea from the phone monopoly breakup many decades ago.

        7. Pete Griffiths

          Andy – correct me if I’m wrong but there wouldn’t even be an internet if it were not for the government. It wasn’t private enterprise that invented or developed the internet, right?

          1. andyswan

            That is very likely true. But it wasn’t govt content regulation that invented it, and that’s what I oppose. I don’t oppose the govt using or benefitting from the Internet.

          2. Pete Griffiths

            I’m not sure I completely get your point. What do you mean by ‘govt content regulation?’

      2. christopolis

        like it did with AOL

    3. Sam

      Ted CRUZ may not be a stupid man,But he sure thinks we all are.Comcast cut back on the speed to net-flicks customers last year until net-flicks paid million in extra charges to resume normal speed to their customers again…. This is black mail and it is exactly what Obama is trying to stop.Keeping the net neutral and freely open to everyone is a great proiority.Comcast made net flicks pay millions in extra dollars last year to keep equal streaming open their their customersNext year it Comcast will be demanding big money form online retail stores or be voided form their customers view completely.Its not rocket science ..Da

    4. Sam

      President Obama just proved whose side he is on–that of the American people and an open and equal Internet. Obama has stood up for All Americans and not the big internet providers..Of course many who have always been for NET neutrality will change their minds due to Obama being for it,ExampleThe president’s statement is a bold repudiation of FCC Chairman Tom Wheeler’s dangerous “hybrid” plan, which would allow for the creation of fast lanes and slow lanes on the Internet.2His statement was immediately attacked by AT&T and Verizon, and by Republicans like Senator Ted Cruz who has received campaign donations from–you guessed it–AT&T and Verizon!

    5. madcapfeline

      Ted Cruz knows what Comcast pays him to say. End. I can not in good conscience trust the word or intention of a man who is in the pocket of the company that would benefit most from the end of net neutrality.Allowing Comcast et. al. to determine which web pages we have access to is beneficial only to the bottom line of the ISP. The burden of proof is hardly extraordinarily high, and has been met. If net neutrality fails, the ISPs will demand to be paid by the customer for access to the service, and will then demand to be paid again by the content providers for access to the customers.It’s not about government control. I’m not sure where your getting the idea that the government is trying to gain “control over enforcement of content distribution, pricing and delivery methods for Internet data,” but that is patently false.And I’m not sure where you’ve been for the last few years, but the net neutrality issue isn’t new. This has been going on since Verizon tried to extort people into paying more money for less service. Also, historically, young people tend not to vote in mid-term elections. I wouldn’t get too comfy. See you in 2016.

    6. SubstrateUndertow

      Under network conditions that old simplistic/vestigial left vs right ideological framing has the wheels falling off it !That ideological “hook line and sinker” mentality smells so much like America’s North-Korean propaganda analogue.But…But…But… we don’t have giant pictures of the leader just billion spent on Public Perception Management.Both public and private oligarchic interests play the propaganda game.Us citizen on the other hand are playing the role of “monkeys in the middle”.For us citizen, it has to be a sober open-minded balancing act between these two propaganda extremes if we are to retain any semblance of democratic control.This constant left vs right propaganda spectacle is obscenely injurious to American democracy !

    7. Brian

      Without the government’s involvement, the Internet as we know it would not exist. The 1st 10-15 years were U.S. government-only driven and no private company was working on something like this on its own. And that invention has literally changed the world. Don’t fixate on the problems of government without acknowledging its countless wins. That’s political bigotry.

      1. Pete Griffiths

        Correct. Thank you.

    8. jason wright

      how is it possible that this kind of content can reach so many informed people so fast?

    9. bmathes

      > Ted Cruz knows more about this issue than most of us.I know an awful lot of people in this thread, some by name, some in person. We are all technologists, venture capitalists, and other types that make our living building/supporting/creating the internet or upon the internet. It is literally, for some of us, our life’s work.Ted Cruz is certainly an intelligent man. It takes an awful lot of intelligence/gumption/etc. to make it to national office. But he definitely doesn’t understand the issue more than most of the folks in this thread. If he had spent as much time on this as we had, he wouldn’t have had time to win federal office.

      1. Pete Griffiths


      2. andyswan

        The issue isn’t a technology issue, it’s a role of the Federal government, regulatory issue. Something he knows far more about than anyone on this thread.

        1. David Semeria

          I live in Italy so I don’t have a dog in this fight.I’ve read all of your comments in this thread Andy, and I think you’ve perhaps missed one thing: *somebody* has to regulate the last mile.If it’s not government it will be the telcos themselves. Skepticism aside, who do you think will best defend consumer interests?As an investor, how would you feel if one of your companies didn’t have the funds to buy a seat at the top table? Tough shit, you might say, that’s market forces at work.But that very freedom of access to the end user was fundamental in allowing hundreds of — now household — names to disrupt much wealthier incumbents by providing consumers with better services at lower cost.Regardless of your dislike of big government, your position seems significantly more anti- than pro- business to me.

    10. Jim Ritchie

      This is politics, tax grab and a government “solution” looking for a problem. I don’t see consumers clamoring for a change here. I have Comcast and can choose from at least 5 other ISPs. I pay for their lowest service and get 60Mbps. Where’s the big problem? (poor Netflix).Obamacare has been an unmitigated disaster for me personally with rates up 86% YoY and going up least another 15% this year. Not only that, but two of our primary care doctors have dropped the Covered CA plans.I put my faith in the technology markets to provide a better solution than more government regulatory oversight.

  7. Tom Labus

    More Google Fiber and a few more like that. Where Google is T matches their speed.

  8. kidmercury

    look at all the countries in the list that are faster than the US. do they have anything in common?they are all really small.look at US internet speed by state, and filter out the largest states with large parts that are less developed — alaska is the ultimate example. then re-do the study.US internet speeds are getting faster. average speeds are getting faster, peak speeds are getting faster, broadband penetration is growing. here are stats:… (Q2 report is out but even after registering i cannot access; if anyone has and would like to share that’d be great 🙂 )the harsh reality is that net neutrality advocates have no data to substantiate their viewpoint. it is simply unscientific fearmongering.moreover, obama’s version of net neutrality is largely about title II reclassification. the kind of title II reclassification that the FCC is suggesting isn’t going to stop fast lanes. that’s good in my opinion, but not what NN propaganda is really about. so, there seems to be a bit of a disconnect as to what NN really means. it may be useful to focus on title II reclassification, as that is the legal matter that i think may really be the focus.

    1. andyswan

      Shhhh what does population density have to do with last-mile speed complaints? Lol

      1. Antonis Polemitis

        Alaska + Wyoming + Montana + South Dakota + North Dakota (the five sparsest) account for about 1% of the population so even if you spot them at a 0kbs download speed won’t really impact the chart

        1. christopolis

          and the entire country of Germany is the size of Oregon.

    2. ci5er

      To your point, it makes zero sense to compare the US to Singapore or HK as the basis for an argument about rational policy.If the countries of any “size” were clustered, it would be a ranking between countries like the US (which is very large), Mexico, Brazil, Canada, UK, France, Germany (C’mon, I know — but larger than Monoco!), Spain, Russia, China, India and Australia. Amongst that cohort, the US is not doing that badly.”We want the Internet to be free, so let us subject it to 1930s era government oversight.” Really?Actually, this may well be the right direction, but I’d like to see more details. I have too much faith in our ability to screw things up in the implementation of programs with worthy objectives.

    3. Swift2

      Yes, we have a big country. We used to see that as a possibility, not as a burden. The reason it’s threatening to shut down is because the pipes think they own the content. We should pass legislation enabling townships and municipalites, or whole states, to compete with the ISPs on a non-profit basis. There is lots of fiber around. A city can jack into it. We can have hundreds of gigabit cities. That changes the game. The practice of bundling, to get as many as possible paying them $200 a month, is pure marketing. If you actually have gigabit, you are a nanosecond away from your relative on the other side of the world. If you have gigabit, you could sell off a secure wifi access when you’re not home and people wouldn’t need LTE. On my block, there are 100 wifis. But the closest cell tower is a mile and half. We should get away from the theology of private v. public. Whoever pays for it or profits by it is one part of the equation. I think government might rather invest in backbone (the digital kind) and make it available individuals. And ISPs should not strangle bandwidth, they should increase it. In fact, they should all compete in the only thing that matters, broadband. Speed, reliability, transparency, and price. To the producers belongs the content.

    4. mdelvecchio

      I’m in a major urban metro and only get 30mbps if I pay for a premium level. My neighbor gets the base tv combo package and is capped at 2mbps. Pathetic.

  9. Barry Nolan

    Anybody know how if this proposal on Net Neutrality applies to wireless carriers?

    1. Nick Grossman

      that has been a central point of debate. internet freedom advocates (and now obama) are calling for wireless to be included. in the 2010 version of these rules wireless got dropped at the last minute and it just applied to wireline. we will see.

      1. Barry Nolan

        Thanks Nick

  10. Bob Struble

    Love you Fred and your heart is in the right place but I could not disagree more. Putting the internet under the heavy hand of government wil be the quickest way to introduce the massive distortions, politics, patronage and payoffs, to say nothing of terrrible service and cutomer focus that we see in basically every other utility overseen by the governmnet. You like the way the IRS is run? The VA? The Post Office? The TSA? Your local cable company or gas company or electric company? The best thing the government could do would be to open up their regs so that others can compete with new technology to offer competition in the last mile. I am no Ted Cruz fan, but he is right here.

    1. fredwilson

      I guess that happens in voice, electricity and water were we have among the best services in the world. Unfortunately this is religion Bob. You are anti all regulation and can’t see this for what it is

      1. Bob Struble

        They are good yes I’d argue because they don’t require any innovation or oversight beyond price controls. There is little tech innovation and certainly no thorny issue like privacy. I spent a good part of my early career in the FCC trying to get them to change rules to allow innovation in the broadcast radio space. I’ve watched closely at how FCC oversight has distorted the broadcast radio and TV markets, who spend a good amount of their time worry about influencing regulation as opposed to innovating or improving. I’d say strongly you of all people do not want to be going to the FCC for approvals of your next great idea.Ask yourself this. How good was voice before deregulation? You could get one phone, it was black, with a rotary dial. Even after dereg, I sold long distance in the early 90s. We had to have a a whole group who did nothing but analyze the regs. Idiotic.

      2. christopolis

        in other words Bob is dumb. good argument. Regarding our great water quality there is regular shortages caused by people watering their lawn too much. Good example Fred.

      3. kev polonski

        Lets take two of your examples – electricity and water. Data centers get cheaper electricity rates than homes and same with water – commercial establishments get cheaper rates than homes. Also both water and electricity are metered. Are you open to folks being charged by the actual number of bytes consumed? Because I would like that – I see no reason why Johnny who wastes all his time watching stupid youtube videos shouldn’t pay more than what I do.

      4. Bob Struble

        Fred you will claim it is religion (and maybe it is, religion isn’t all bad) but there is a thoughtful treatment of the issue making many of the same points I tried to ion today’s WSJ editorial page. Andy Kessler’s piece is right on and dovetails with my own experience.I didn’t mention that I also consulted back in the day for a regional power company. Without question, their smartest and most important people were the ones charged with dealing with the regulators, specifically the every 3 or 4 year tariff or rate setting. Is that how we want our best and brightest deployed in the internet space?

      5. kidmercury

        Water regulation is a disaster. Total mismanagement of resources, polluted, dirty water everywhere.

        1. ErikSchwartz

          Compared to what? The Cuyahoga River and Lake Erie don’t catch on fire anymore. The rivers in Maine are vastly cleaner then they were 40 years ago.The west is a mess but that is about a long term drought.

          1. kidmercury

            water shortages could easily be the world’s biggest problem, in the USA as well, and it is a result of a variety of factors — one of which is cerrtainlly in the inability of governments to track, price, and deliver water without wasting an obscene amount.but that is a hard problem and i am somewhat sympathetic to government’s shortcomings here, and do not passionately dispute its legitimacy in being the governor of water. i do find the example of government doing a good job at regulating water, though, to be silly and misinformed at best. there is a book called aguanomics that goes into all the terrible details, complete with a dystopian outlook as to where we end up if we don’t take necessary actions.just as water systems need to be totally re-envisioned, so too will networking as apps become more bandwidth intensive and as more people come online. but i highly doubt net neutrality will put us on the path to solving this problem; in fact, it will probably do the opposite, and lock us in to a situation that is more like the water situation. the ISPs and application developers will come up with the solution to bandwidth; government’s role, if any, should be to provide the foudnation for that to occur.

        2. pointsnfigures

          The opportunity cost to go from 99.98% pure water to 99.99% pure water might be too high given the benefit.

      6. Richard

        Let’s be honest about the trade offs with deals with the devil, I remember keeping conversations short with my grandmother because of long distance rates, buying bottled water to avoid flouride.

      7. Pete Griffiths

        Absolutely right. And ideological positions held with the fervor of religious fanatics is a dangerous thing. It admits of no shades of grey, gives no credit where it is due and makes compromise difficult or impossible. It’s a poison.

    2. johnmccarthy

      I love my local gas and water and electric company. I pay the bills and they deliver exactly the amount I want, when I want it. Literally, just turn on the faucet. Pretty simple. Wish my cable company operated the same way.

      1. pointsnfigures

        thanks for bringing up gas and water and electric. The tech that delivers them to your home is relatively static and doesn’t change for years and years. Broadband is different and can change. What happens when it’s beamed via satellite and we don’t need wires? What if a totally new tech is created that changes the entire game? That’s not going to happen with government in charge. Look at how difficult and expensive it is to bring High Speed Rail to the US-another pet project of Obama.

      2. ErikSchwartz

        This. Flat rate is what is killing us.Of course as soon as it’s metered you’ll see the Netflix’s of the world change their tune.

    3. Pete Griffiths

      Presumably you think that government does a lousy job of everything it tries to administer. Which raises the question – do you want to privatize the military? the police? Do you want to do away with public hospitals? Roads? The problem with this blanket damnation of all things government is to be able to rationally explain where you draw the line.I agree that there is a lot of incompetence and waste in government. But there are somethings that we just have to suffer that waste because there is no viable alternative (military, highways…) And in passing I should note that the idea that private enterprises are bastions of great cost effective management is laughable to anyone who has worked in large corporations. They are run by people, the overwhelming majority of whom are average (that’s statistics for ya). They waste gigantic amounts of money, they too can be extraordinarily inefficient and provide lousy service.If we cling to an ideological position “Government bad, private good’ we aren’t really moving the ball down the field. We’re just holding on to a dogma. Reality is more complicated and if we want to be able to devise real policies we have to deal with the complexity. Ideology and sound bites is fine for elections but sloganeering doesn’t work when you have to actually run something.

      1. Bob Struble

        I am trying not to be ideological Pete. I think the government has a role but it should be limited. I have great respect and generally am pleased with the performance of our military and police in doing a very difficult job. I accept we have to have an IRS (and other agencies) and accept it will have shortcomings and be subject to politicization.My point is the existing internet’s lack of regulation has (in part) enabled it to become one of the greatest sources of life changing innovation and job creation we have seen. So why exactly would we change that? Notably when one can point to (which I tried to do) countless examples of government regulation stifling innovation, creating perverse incentives and reducing innovative industries to ones that spend their time figuring out how to curry favor with regulators.

        1. Pete Griffiths

          Once we agree that government has a role and we get out of ideology then we can indeed have a sensible discussion about where to draw the line.I have no problem with people who favor a lesser role for government in control of the internet. I just want proper reasons for why that will be a social benefit. Not a tirade on how crap government is. 🙂

    4. Gregory Magarshak

      Bob, the internet used to be classified as a common carrier utility before George W Bush. It was reclassified by Bush. So now bringing it back to what it was is Orwellian? Did the internet “suffer under the heavy hand of the government” before George W Bush? Because that’s what we’re talking about.A neutral Internet provides a place where tons more innovation is possible. You sound like you’ve been disinformed by Libertarian cookie cutter responses – which aren’t applicable here.

  11. JLM

    .I think you may be misrepresenting Ted Cruz’s position on the Internet. Being from Texas myself, I have actually spoken to him and I think it would be fair to characterize his position as being against government intervention in the Internet.Like many Republicans — for whom he does NOT speak myself included — he favors market forces defining the……………market. Ted Cruz is not under the thumb of the big telecoms.The FCC, which is controlled by the Democrats and which started this debate, wants to characterize the Internet as falling under their aegis as a regulated telecom function. This is the basic fight here. The FCC wants to regulate the Internet and this entire debate is at their incitement.The FCC wants to be able to regulate the Internet and others, Cruz included, think it is not within their legislative authority. This is the real fight here.The President is making a gratuitous but very shrewd move here. He is saying that he is for net neutrality while embracing the notion that the FCC IS the regulator of the Internet.Understand also this is a tax grab at its core. If the Internet is a telecom function then it is subject to a 16.9% telecom tax. By saying the Internet is under the FCC while offering blandishments as to its “net neutrality”, the President is in effect imposing a tax on the Internet. The President is a taxer and would like nothing better than imposing such a tax.Follow the money, y’all.JLM.

    1. Dave W Baldwin

      Ok, then Cruz needs to be more forthcoming on his position rather than blanket statement which doesn’t show knowledge of details.

    2. Tom Bakalis

      Well said. I couldn’t agree more. Let’s also not forget that Obama appointed a telco lobbyist as head of the FCC. Why aren’t more people questioning his motives for that move?

      1. Swift2

        He either wanted to cut a deal with cables, striking some kind of compromise; but as usual, there is no viable compromise. The Internet belongs to the People. It’s only a wonderful commercial platform if it goes that way.

    3. fredwilson

      the government has intervened in the Internet with their decision to classify an essential services as an information service. That was a bad decision and we just need to unwind it

      1. William Mougayar

        If Tom Wheeler just reclassified ISPs under Title II, that would do it, right?

        1. Swift2

          I think so. If the participants make money providing information, great. If they want to make money withholding information, that’s not their job. Corollary: the content cannot be owned by the pipe. Cable expanded the world from 30 or so channels to 500. What’s a “channel”? The consumer is the buyer. Channels are outmoded.

    4. William Mougayar

      JLM, but Tom Wheeler was also a cable lobbyist, so he’s been stalling things, although he said he could just reclassify ISPs under Title II if he wanted to.

    5. pointsnfigures

      Happy Veterans Day JLM and thank you for your service.

      1. JLM

        .See my blog today. I was blessed to be able to lead American soldiers. I am the one to be thanking others for the opportunity to lead. I did my best and I grew as a man.http://themusingsofthebigre…JLM.

    6. David Semeria

      It’s about monoply rents, JLM, that’s all.

    7. ShanaC

      Thank you for your service JLM (but I don’t want monoplies or near monopoly)

    8. Guest

      If I follow the money, essentially the entire “Senate Subcommittee on Communications, Technology, and the Internet” is under big telco’s thumbs….…How can we possibly believe there is no conflict of interest here?(

    9. Amar

      follow the money? how can we possibly think anybody in the senate subcomm for telco does not have a conflict of interest?src:

      1. JLM

        .This discussion did not start in the Senate, it started in Obama’s appointed FCC. The Dems have a majority of the seats there.The Telcos have done a great job of funding their interests including the PresidentJLM.

    10. Peter

      There’s no tax grab here. There’s no 16.9% graven in stone. Get a life.The real issue is that Cruz wants no rules – so we have the “OK Corral”. Biggest/fastest gun wins. Obama wants something less violent.My take is they’re both wrong. What’s needed is to split access and content in internet-land so that ISPs and TV are completely separate companies. As we have in some places for other utilities (in my area there is one company that does poles-and-wires and several that sell electric power. Poles-and-wires is a local, regulated monopoly and power generation is competitive, multi-company)It’s time to split internet “access” and “content” the same way. So you can be an ISP (provide access) or a content company (TV, movies etc). But NOT both.Once we separate access and content the “net neutrality” issue becomes a lot simpler.

      1. JLM

        .Peter, you will likely have a list of taxes available to the Obama administration they did not enact? Look carefully as they are up to over 500 new taxes already.Your solution is a bit more regulation to avoid a bit of regulation? Bit like bleeding a patient with leeches to heal them. Government picking the winners, NEVER works.No, this is absolutely about extending the FCC’s regulatory umbrella and their taxing authority. The idea came from the Democrat dominated FCC and nowhere else.Everything else you say is perfectly plausible and the “wheeling” example is a good one. Nonetheless, in Austin, Texas I have 1gig service from a little company called Grande Communications who stole a march on Google Fiber and AT&T — competition is a beautiful thing.JLM.

        1. mdelvecchio

          I simply don’t care about a new tax on Internet, if it means we get faster and more reliable service as seen in the rest of the world.

          1. JLM

            . I have 1gig service right now. What do I get?JLM

  12. JimHirshfield

    Oh, it’s Obamacare for the Internet. Now I get it. Why didn’t ya say so???

    1. PrometheeFeu

      Obamacare polls abysmally. It’s just shorthand for “that thing you don’t like that Obama is doing/trying to do.”

      1. JimHirshfield

        That’s all understood. And as others have mentioned, if it’s Obama’s idea, the Republicans have to be against it. Politics has turned into each side taking an opposing position no matter the issue. It’s disappointing they can’t figure out a way to work on things that matter and get away from playing political games. (one can dream).

        1. pointsnfigures

          Maybe it’s because Obama hasn’t had a good idea…..or at least when he details a good idea, then it stinks.

          1. JimHirshfield

            Could be.

    2. andyswan

      I don’t think the analogy is that bad. It’s the federal government dictating to companies (ISPs/Insurers) what their product must provide.

      1. Salt Shaker

        The above sentence is quite true, but it’s incomplete….it should end w/ “to insure that public interest (a far greater good) is provided for and protected.”Of course, the devil is in the details, and one can certainly argue that a policy like Obamacare, for example, has fallen short of anyone’s expectation, even Obama’s, but it’s hard to argue w/ the logic of providing affordable healthcare for the masses. The GOP will now focus on blowing it up for the 900th time, instead of any attempt to fix what’s wrong w/ it.In government, ego and/or not invented here syndrome (not policy) too often trumps practicality, which leads to perpetual dysfunction.

      2. JimHirshfield

        May be. I just think it’s like reducing an argument to name calling or profanity…doesn’t always come across in best light. Better to focus on tangible point, IMO.

        1. kidmercury

          what is the tangible point? what problem does net neturality solve? advocates of NN don’t really communicate that in an honest, scientific manner.

          1. JimHirshfield

            You might be right. My point in this mini-thread has nothing to do with which side is correct. All I’m sayin’ here is that the Senator’s tweet reminds me of debates that devolve into name calling; not healthy for any side of the argument.

  13. Twain Twain

    As well as investing in their networks, the US telcos can take a leaf out of Téléfonica’s book and actually invest in startups ( they’d better understand the importance of Net Neutrality to foster the next generation of innovative startups, unencumbered by upfront sunk costs set by the telcos.

  14. Guy Lepage

    Communications in the US is ripe for disruption. From the service to customer service. Surprisingly, in Canada there are a couple startups starting to make a bit of headway fighting the giant communication companies.

  15. Bruce Warila

    In Massachusetts, I believe last mile providers have to separately and painfully negotiate with 351 towns and cities (bureaucracies) to install new infrastructure. To eliminate local monopolies /duopolies, wouldn’t it just be easier to mostly eliminate this friction?

  16. Chimpwithcans

    “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 would be interesting to compare service provision in those countries mentioned above – how many providers, who runs the show, who is the right wing nut trying to get more lobby cash? Who is the left wing loony hellbent on taxing the rich? An infographic would be nice too. 🙂

  17. MFishbein

    “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”Wouldn’t increased government regulation give the telcos even more power?

  18. William Mougayar

    I wonder how different this debate if the US was at the top of those speed rankings. As an observer, what I’m seeing is a deep mis-interpretation by both sides of some basic concepts:- freedom- openness- innovation What’s ironic is that each side is claiming that their approach meets the above, but they really mean different things. If I was a mediator, I would start by laying out some common understanding about what is meant by Internet freedom, access openness, and technology innovation.

    1. PrometheeFeu

      Net neutrality “winning” would result in the FCC, which is controlled by lobbyists from the cable industry, gaining authority to control rates on ISPs. How is that a good thing?

    2. Pete Griffiths

      Good luck. A mediator needs some ideological common ground. This is a religious war and mediators have found such wars to be tough to resolve.

      1. William Mougayar

        Well, my thoughts is that a mediator can bring both parties closer together. Kind of like legal mediators work prior to going to court. They try to settle amicably by reasoning with the parties.

        1. Pete Griffiths

          That is fine if the parties are open to reason. But ideologically motivated fanatics aren’t.

  19. Salt Shaker

    “Net neutrality is Obamacare for the Internet.” Hardly. With Obamacare I can chose between 5-6 healthcare providers and literally dozens of different plans. It’s called choice. With the Internet I’m saddled with, at best, two different providers. Yeah, our gov’t fucks up a lot of stuff, but on occasion they get involved and do get it right.

  20. studentdotcom

    One of the GOP’s goals is to make their party more attractive to young people. If the GOP doesn’t get on board with supporting net neutrality, they will really be screwing themselves over in terms of having their brand be attractive to young people. Net Neutrality IS a conservative idea. Let capitalism flourish, but insist on net neutrality.

    1. andyswan

      “Net Neutrality IS a conservative idea” — nonsense. The conservative idea is to keep the government out of the content-distribution business, as it has been for the past decades of internet flourishing.

  21. Raleigh85

    How is this lost on so many people?

    1. Guest
    2. johnmccarthy

      Easy to see yesterday as his mea culpa moment.

      1. Raleigh85

        I am not sure if you have been paying attention the past 6 years. This is his style of governing.Step #1 Create a crisis or have the media pitch a crisis to the American general public.Step #2 Suggest a solution which sounds great but is actually a decoy for radical legislation.Step #3 Sit back and laugh at how stupid everyone is once they realize your solution was completely different than how you sold it.Has history taught us anything?

        1. JLM

          .So accurate as to your reading his email.Well played.JLM.

        2. Nebuchadnezzer (AFTP)

          Le gasp. I bow down to your greatness.

    3. OnlyfortheSEO

      Lucky that I live in South Africa then. He has no say here and it will take twenty years to implement it in Africa. I have a site hosted in South Africa and Obama wont be able to touch it for a few years at I sometimes think it is better to live in a 3rd world country.

  22. christopolis

    ” We have allowed the telcos to capture the regulators ” but this time with these regulations you will stop them? You are joking right? The ignorance of do-gooders never ceases to amaze me. Once you are on to your next crusade the telcos will be back capturing the regulators and then you really will have problems.

    1. andyswan

      “This time is different.””We just had the wrong people in charge.””This is a one-time fix”

      1. christopolis

        also amazed by the short term thinking and lack of principles. do they ever think “yes we have our people in charge now but what if the wrong people get in charge?”

  23. Evan Van Ness

    You did an impressive job of demonizing Cruz’s opposition.

  24. kev polonski

    First regarding the claim that this is the gutsiest thing by Obama – releasing a video recording of his statement while he is in China is gutsy? We have truly hit bottom and started digging, haven’t we?Second, do we really think that classifying Google’s fiber business as a “utility” that is regulated by the govt is a good thing?Third, the utilities like water, sewer, electricity are all billed by usage. I think doing that to internet consumption should be a good thing. If someone wants to waste all their time watching movies, let them pay for it. So if you are going to make the argument that the internet is a utility, what is your argument against paying for usage as opposed to the current scheme of unlimited usage?Fourth, while we are at it, does anyone know how much regulatory reporting telcos have to do? I know because I was involved in a multi-million dollar project for a major Telco. They spend millions each month to provide government required reports – a complete waste.

  25. BillMcNeely

    I am from Texas. I might one day consider what Sen.Ted Cruz has to say if he did not have to hate on Pres. Obama to make everyone of his points. Some of those points might even be valid.Whatever the crisis of the week is in this country it’s always blame Obama.Maybe he should hire @JLM:disqus to soften his approach.

    1. Chimpwithcans

      As a foreigner I don’t know CRUZ, but I am shocked to hear that @JLM Obama criticism is mild in comparison??!!

      1. BillMcNeely

        Yes. @JLM criticism is mild, measured and logical compared to the Tea Party’s. You will hear some crazy stuff out of them.

  26. panterosa,

    Romanians have faster speeds than New Yorkers? Our infrastructure and attitude towards it are old third world, and new third world doesn’t even do it that way now. #depressing

    1. pointsnfigures

      Come to Chicago. Best internet pipes in the country here.

      1. panterosa,

        We are coming!! sent you an FB message…

  27. PrometheeFeu

    The first thing to realize is that there is no reason packet prioritization cannot be done to provide a useful service to end consumers. The packets from a live video streaming event are much more time sensitive than the packets for an email and so if you need to pick which one to deliver first, one clearly should win. From that point, it’s only a matter of deciding how you allocate the scare resource of spots in the priority queue. Markets are pretty good at making that decision.The second thing to realize is that if the ISPs are classified as utilities, this exposes them to rate controls. The current plan is for the FCC to forbear rate regulation. Forebearance means exactly what it sounds like, the FCC will assert an authority to control rates, but it will not exercise that authority. But there is no guarantee whatsoever that the FCC won’t change its mind at a later date. And when the FCC does decide to exercise its rate setting authority, who do you think will benefit? Small businesses and consumers or the telcos who have completely captured the FCC?If you really want a government solution to this problem, the right approach is to vertically disintegrate ISPs. Force companies to split such that the people selling a service to consumers don’t also own the last mile. The last mile can be a dumb pipe and the rest of the network can be smart. But it will have to be smart to your advantage as a consumer since there is competition there.Or course, another approach is to foster competition. 1 type of last mile may be a natural monopoly, but with the advent of fiber, there are reasons to lay some new pipes. So now we do see competition and we see how incumbent telcos react when they face that competition. They slash rates and/or increase speeds. Similarly, while wireless doesn’t offer as much bandwidth, it does offer competition and there isn’t as strong a natural monopoly in that area.Net neutrality is a bad idea. Smart pipes are better than dumb pipes. The problem we’re facing today is the threat of smart pipes being operated by monopolists. But that problem is solving itself as we speak.

    1. ISP_Customer

      You only need packet prioritization in a world of scarcity. Given the economics of broadband, we should be focused on policies that create a bandwidth abundance.Overturning forbearance is difficult and the burden of proof rests with the FCC to justify any reversal. Beyond that, ISPs are currently free to price their service however they like.“vertically disintegrate ISPs.”? Really? I can come up with plenty of policies that sound great if you don’t take any of consideration of the political and cultural environment in the U.S.More than 80 percent of the public have one option for broadband over 25 Mbps. Most Americans are not expected to receive another option in the form of a fiber to the home service anytime soon. The limited fiber deployments that have occurred to date are not offered to the overwhelmingly majority of the public. Further, a duopoly doesn’t necessarily discipline prices. Just go look at the prices of FiOS and and the local cable company in a given market.If you have a listen to the quarterly calls of ISPs, you’ll quickly realize that the lack of competition is getting worse. Time Warner Cable told investors “We estimate there is still 4.5 million DSL customers in our footprint, 1/3 of whom take video from us. Given the superiority of our broadband offerings to DSL, we find that inconceivable and unacceptable.” Indeed “the top cable companies accounted for 99% of the net broadband additions” in the last quarter.

  28. Salt Shaker

    If the TWC/Comcast merger goes through many will be doomed, independent of net neutrality. Monopoly only works as a board game.

  29. Ben Kinnard

    Does any other country not have net neutrality? Has that worked/not worked?

  30. Ana Milicevic

    We should have just labeled it ‘internet freedom’ way back when and called it a day. It makes for a poor soundbite to argue against freedom.

    1. Nick Grossman

      there is no question that has been a problem here

    2. andyswan


  31. nick l

    If you get phone service from your cable company, should they “prioritize” that traffic so that you can always make phone calls?If you get video service from your cable company, should they “prioritize” ESPN and CNN so you can get a crisp, HD picture at all times?They do that now. There’s only one coax cable coming into your house and it contains a finite amount of spectrum/bandwidth. Yet they seem to have managed things in a way that allows consumers to access any web site they want. How often is your son watching ESPN and you feel like it’s slowed down your Youtube videos?So where is the problem that requires intrusive regulation? Who has been harmed?Netflix has made some claims but, as the largest consumer of bandwidth in the country, have some clear interests to protect. In fact, there have been more instances of blocking happening the other way — content providers blocking specific ISPs during business disputes.

    1. nick l

      I also don’t understand your assertion that these companies have said they can’t invest. What they have said is that heavy regulation will cause them to invest less in the future.The cable companies are investing heavily. For instance, in the last twelve months Comcast has generated $8.4bn in net income and invested $7.2bn in capital expenditures.These are huge companies so talking about absolute profit numbers doesn’t provide context. They have to be profitable enterprises if they are going to keep investing. Here are the returns on capital (from CapitalIQ, with no adjustments) for some of the companies you mentioned:Charter: 4%Time Warner Cable: 9%Comcast: 9%AT&T: 11%Cablevision: 13%Verizon: 13%

  32. Sam

    President Obama called on the FCC in the strongest possible way to save the Internet by undoing a Bush-era deregulation scheme and reclassifying broadband as a public utility under Title II.When it comes to Net Neutrality. President Obama just proved whose side he is on–that of the American people and an open and equal Internet. Obama has stood up for All Americans and not the big internet providers..Of course many who have always been for NET nutrality will chnnge their monds due to Obama being for it,ExampleThe president’s statement is a bold repudiation of FCC Chairman Tom Wheeler’s dangerous “hybrid” plan, which would allow for the creation of fast lanes and slow lanes on the Internet.2His statement was immediately attacked by AT&T and Verizon, and by Republicans like Senator Ted Cruz who has received campaign donations from–you guessed it–AT&T and VERIZON!!!

  33. pointsnfigures

    I agree with many of Fred’s points. But I disagree with the sentiment that Obama understands the issue. I also disagree with a government solution to the problem. Obama is all about utilizing government to control private resources. Period. Andy Kessler said it best here:… “Get ready for the Department of Broadband.” Fred hinted at the problem in his post. Telco’s have used regulatory capture to create a monopoly for themselves.Obama chooses his words carefully. You could read his statement of yesterday and anyone from either side of the aisle could have agreed with it. However, the devil is in the details. Time and time again, every proposal that the Obama administration has put forward has stunk to high heaven. Obamacare sucked. Dodd-Frank sucked. His energy policy sucked. The policy he will fashion for broadband will probably suck.I would point out that the entire body of regulation on the internet was fashioned after the Railroad Act of 1887. At this point, it would be better to toss out ALL the regulation and have the internet service providers compete in a wild west shoot out for market share. Let the private markets decide. Any Federal regulation that is proposed by either party will allow for more regulatory capture, and eliminate competition making service worse for us all in the long run.

    1. Tyler Hayes

      Next time you’re in SF I’d love to hear why you think Obamacare sucked.

      1. pointsnfigures

        Where do we start? Cost, service, competition, doctors overhead, trial law judgements, device taxes or access?

      2. kidmercury

        cost is the big one, and it discourages employment as a result. it also limits reduced government spending, which in turn cases the national debt to increase, which could be regarded as a real national security threat.obamacare also reduces medical privacy, which is another huge issue.and what’s the upside? the supply of healthcare doesn’t expand by edict. in fact it might decrease, if medical professionals are not compensated enough as a result of the impact of legislation.

        1. Neil

          I honestly am clueless about “ObamaCare.” However, I do know a couple of 40-something mothers who had chronic dental problems (lots of pain and unaffordable crises) who have been taken 100% care of under the new medical insurance regime in Oregon. This has/will free them up to be more productive (just imagine the difficulty of ongoing tooth pain) and to be more marketable. A healthy smile is a miracle confidence builder for someone who has had chronic dental issues.This did not change their physical comfort, it opened them to their full employment potential, which also impacts the lives of their children.My impression is that ObamaCare is a mixed bag. But my personal experience is that it is life transforming.

  34. BostonBizPerson

    Utility-style regulation of internet access is destined to block competition, raise prices, and slow down innovation. Yes consumers are hopping mad at recent Netflix throttling, but this inconvenience is the temporary fallout of a high-stakes brinksmanship negotiation between carriers and content providers to see who really adds the value. It will sort itself out because in the end consumers will only pay so much and there are a ton of substitute ways to be entertained. Extreme cases can be addressed right now by going after the worst offenders with “truth in advertising” lawsuits (they promised me certain download speeds) and does not require the government to step in and set up a whole new regulatory apparatus that would give politicians a juicy new way to extract rents for years to come.

  35. Robert Heiblim

    Thank you Fred, I am on side with you and have also gone to Washington to tell my representatives and others the same. This is not a small issue and the idea that the GOP could bring back things like CISA is not good. We need to explain that this is the infrastructure of innovation these days. As you well show we are already way behind and it will not get better if shorter term corporate interests rule over the need for world class infrastructure. While I do not like regulation, sometime it is just what is needed.

  36. Tina

    Does anyone else find it hard to believe the AVERAGE speed Americans get is 31mbps?

  37. OldManGoldenwords

    The problem is NetFlix has agreed to pay premium to ISP’s for their contents. NetFlix want to block new companies from competition. This creates a route for lobbyist and sold out politicians to make these kind of arguments. I think the problems is three companies with big pockets control most of the american network. Their pain is other companies are making bigger profits than they do using their network. They forget this is the principle of being service provider.

  38. Tech Talk

    Great article! The internet is decentralised for a reason! There should be no governing bodies regulating, prohibiting or censoring access.

    1. bmathes

      How do you feel about private bodies regulating, prohibiting, or censoring access? ‘Cause that’s what you get when there are so few co’s. Private coercion is real, too.

  39. Gøran Berntsen

    Apparently, you are not the only one willing to educate Ted Cruz on this matter:

    1. ErikSchwartz

      Any argument that starts to drag the Netflix PR talking points into it is pretty flawed.Netflix has a dog in this fight. They want their private CDN to to peer directly and their edge server collocated in the ISPs network, that’s the opposite of neutral.

  40. Pete Griffiths

    Well said.And that Ted Cruz dude. he’s a really creepy opportunist. Just sayin’

  41. ErikSchwartz

    Every time I hear politicians talk about a field where I have some domain expertise I cringe at how thin their veneer of understanding is.It makes me wonder about all the areas they talk about where I don’t have any domain expertise. Are they equally illiterate on these subjects?

    1. Pete Griffiths

      Yes. 🙂

  42. sam

    you give ted cruz too much credit – he’s only a mouthpiece for whatever special interest lines his pockets. he’s pure self interest written large. if it’s bad for business but good for his bank account, consequences be damned.

  43. sigmaalgebra

    Sounds good; network neutrality sounds good.The opposite of network neutrality sounds bad, like maybe Big Telco is trying to rip off anyone who wants to send and/or receive bits over the Internet. Sounds bad.My Congressman Chris Gibson and at least one of my senators, Gillibrand, are for network neutrality. Or, without network neutrality Big Server can give money to Big Telco and, thus, have data from Big Server flow quickly while other data crawls along in the slow lane. Let me guess: In a political cartoon, the network neutrality people would be the white hats, and the Big Telcos would be the black hats. Or, white hats, good. Black hats, bad. Good versus evil. Evil, scary. Good, no worries. Evil — as in the morality plays, horror movies, bad guys, etc. Good — as in motherhood, apple pie, Thanksgiving, kittens, puppies, and cuddles.Okay, I’ve watched a lot of TV and movies and read a lot of newspapers and magazines; so, I’ve got the black/white hat thing clear.But in those famous words, “Where’s the beef?”. Or, what the heck is going on? Or, where can we get some information that actually means something at a level above, say, the first grade? Or, really, I don’t have even as much as a weak little hollow hint of a tiny clue what the heck is going on.So, to be more clear on what I don’t understand, let me outline a scenario: I got to my ISP, and they offer me several options for speed. The one I have taken so far, their cheapest and fine so far, gives me 2 million bits per second (Mbps) upload (to the Internet) speed and 15 Mbps download (from the Internet) speed.To confirm these speeds, I can go to http://www.speedtest.netIndeed, the maintenance people of my ISP use this site to confirm that my speeds are as promised.For more money to my ISP I can get faster speeds, e.g., 25 Mbps upload and 101 Mbps download (with a static IP address as needed for registering a domain name, etc.).As far as I know, I’m getting what I’m paying for. If I’m getting less speed than I’m paying for, then I have a gripe with my ISP, and so far it appears that neither of us wants that.But, there are also some big server farms sending, say, video, e.g., YouTube, Hulu, Netflix, Vimeo, maybe some ad servers, etc.I have to guess that such farms have deals with their ISPs much like I have with mine — so much money for so much bandwidth.Indeed, since my project is to have my company be a big server farm, I’ve done some initial shopping for internet bandwidth (that is, data rate) and found, e.g., at a colocation facility a few miles from me. that I can get dual 10 GbE connections to the Internet, that is, 10 billion bits per second (Gbps) Ethernet. How to send 10 Gbps? Have a computer generate data that fast and have a 10 GbE network interface card (NIC), say, currently by Intel from Amazon for $844.60 + $7.29 shippingquantity 1, retail, maybe less on Black Friday. Or, have several servers connected to a LAN switch, and have the LAN switch have a 10 GbE card to the Internet.And there are other colocation facilities — Level 3, Cervalis, and more.So, unless I deeply misunderstand what my local colocation facility is offering me, I should be able to send 10 Gbps into the Internet with usually no problems. And I should have little or no trouble with the quality of service (COS) issues of, say, dropped packets, out of order packets, latency, and jitter (all especially important for audio or video conversations over the Internet).So, as an end user, I can pay to receive at 101 Mbps, and as a server farm I can pay to send at 10 Gbps.Well, for 10 Gbps, at any point in time I could try to send about 100 Mbps to each 100 end users, and, if each of those had 101 Mbps download bandwidth, all the TCP/IP pacing, handshaking, etc. would work out fine and the users would get about 100 Mbps.As far as I can see, that little scenario is the way things are now.Then a server farm with a 10 GbE upload speed and a user with 101 Mbps download speed will be paying for fast lanes. So, I’m lost: Where’s the role of dirty stuff Big Server Farm paying Big Telco for fast lanes different from now?In particular, what’s this stuff about higher priority for some packets over others?Maybe one scenario would be: I have paid for 22 Mbps download speed and want to watch two movies at once, each of which needs the full 22 Mbps. One movie comes from Web site A and the other, B. But A pays my ISP for priority and, thus, the movie from site A looks good at my computer and the one from site B doesn’t, indeed hardly even starts or gets past the credits.Is some such scenario what is meant by priority?Or, maybe I’ve paid my ISP for only 15 Mbps download speed but am watching a movie from Web site A, a movie that needs 22 Mbps. So, without my knowledge, site A pays my ISP to give me 22 Mbps download speed just for the packets from site A.So, I pay for only 15 Mbps but from some Web sites get 22 Mbps. When I’m watching a movie at 22 Mbps from a site that is paying my ISP, then data from a Web site B that is not paying my ISP mostly can’t get to me at all.Then, one solution would be for me to pay my ISP for 101 Mbps download speed and, then, get the full 22 Mbps from both sites A and B.Or, the whole issue of network neutrality is how to handle the data for a user that, in total, is requesting more data rate than they are paying for, and in that case some Web site A might pay that user’s ISP to give priority to the data from site A. That’s what the concern is?It begins to look like network neutrality is about the end user paying their ISP for that user’s download speed instead of Big Server Farm paying for that speed. And violating network neutrality sounds like Amazon offering free shipping, say, via volume discounts from USPS, UPS, and FedEx, while Joe eBay seller charges for shipping.Maybe there’s more, more opportunities for funny business, dirty business, etc., but for that I’ve seen no clear explanations and have just to guess. I’m being told that there are monsters under my bed, but I get no details and have to find and understand the monsters for myself.Sure, I don’t trust Verizon, AT&T, Comcast, or Time-Warner farther than I could throw the Titanic. So, sure, to me Big Telco qualifies as black hats, evil monsters.Now, I’d like to know the details: Just what are the Big Telco monsters about to do to me?

  44. Felix Dashevsky

    Fred, since your views are influential, I wish you’d put the second half of your article (i.e., the main argument) first. Otherwise, a “quick read” (which is probably all that Congress is capable of) will yield a muddled picture.

  45. ShanaC

    I actually wonder what Ted Cruz’s bundler would do if he lost net neutrality. S/he would lose the ability to do targeted campaigns.Oy.

  46. Alexander McNulty

    well this is good news from my company. not only will my API get the same service as other website. i can also use Senator Ted Cruz as and example for my slide deck, when i finally get to pitch Fred. 😛

    1. Alexander McNulty

      Private message me for a link to my landing page!

  47. John

    AT&T has earned $18 billion in net income the last four quarters. Last fiscal year they earned $28 billion in PRE-TAX income. Verizon is at about $17b the last four quarters in net income. It’s a fair point to drill them on, because $18b or $28b makes no difference for this context, but at least get your figures straight.

    1. fredwilson

      i pulled those numbers from the links associated with them

  48. abn

    Thank you so much for this post

  49. Amith ฿. Nirgunarthy

    From my company as well 🙂 abn is me

  50. Mal Reynolds

    As we have seen regulation can be used as a political tool if the Stupid Party ever gets back into power do you really want them regulating the internet. Do you want the current clowns that let the NSA run amok running the internet?Government regulation means low to no innovation. The regulatory apparatus has been captured by the regulated who use regulation to throttle the competition … if a new and disruptive internet technology is discovered you can be sure that the current internet big boys will crush it with regulations to protect their monopoly. Regulation is allowing the giants to get bigger Comcast keeps swallowing cable companies and content providers.

    1. drewish

      I really shouldn’t have bothered trying to parse this word salad… You get that both parties aid and abet the NSA spying right? Building a police state is the only place where bi-partisanship happens.

      1. Mal Reynolds

        You are so kind. That indeed was the dressing on the word salad.

  51. internet tourettes

    I am sorry but both the author and those who have commented do not understand how the government in Washington works. I do because I work here and see “how the sausage is made” up front and personal (1). To understand what is going on now you need to understand a few basic facts:1) No one says what they mean and means what they say. The press and the public are used to float trial balloons and stake issues already decided. The process of comments and statements from officials is merely used to narrow the funnel or frame the decision that has already been decided behind closed doors months ago and is being implemented. All we are seeing now is kabuki theatre and you are being played. Obama’s statement is just that, a statement of one option that may or maynot be considered. The FCC is an independent agency. The president cannot direct their actions but he can define the range of possible options. To state that he thinks that ISP traffic should be re classified and regulated under title 2 of the telecom act goes against the the US Court of Appeals ruling issued in January where the court ruled that the FCC did not have the statutory authority to do so. I do not hold a lot of hope that this will happen unless the decision can be overturned by the supreme court (The same supreme court that made the citizens united ruling).2) Cruz’s statement has no bearing on the process of implementing policy any more than any statement that I could make about the elections in Iceland. It does not matter and repeating it only allows him to co-opt the current situation to give him the appearance of having input into the situation (which he does not).3) Everyone knows that the cable companies and big ISP’s are in the position to hurt the US economy. They know that comcast is funneling ~45 billion dollars of earning to stock buybacks to benefit senior executives stock options and have spent ~1.6 billion on a new headquarters building as opposed to investing in their infrastructure. Verizon has spent 47 Billion in stock buybacks, again diverting funds from network investment in order to raise payouts on senior executive stock options. And keep in mind that with interests rates so low it is financially irresponsible not to invest in long term capital projects with the cost of capital so low. None of the ISPs have made any progress on the rural highspeed initiative and broadband penetration has been gerrymandered only serving financially well off areas. They do not work in the public interest and will not do so unless they are bound by some sort of rules or regulation yet the internet has been one of the key drivers of growth for the US economy and future growth is dependent on both accessibility to the IP network and its growth and stability.4) No one (except a few people) really knows who is being played right now. Is the FCC try to show the big ISP’s that they can’t allow allow the pay to play model to continue because of public unrest or did the FCC stake the ISP “fastlane proposal” the issue with the public so that any final decision with maybe a little bit of additional charges (and billions more in revenue) would seem like a victory for the consumer? Is this decision some how linked to the approval of the acquisition of time warner by comcast? Will that be the “trade” for some sort of net neutrality type of agreement? I work in this field and I don’t know how its going to shake out but all of you comments to the FCC and petitions will have no effect on the outcome. Wheeler is smart, and knows both sides in this battle. He is playing off the public and industry with the hopes that no one will be too pissed off in the end.As to coming down down to Washington and ” and explain it to anyone who is willing to listen….” No one will listen (you might get to talk to an intern if you’re lucky), the players are in the room, the lawyers are hashing out the details, the sausage is being made and only after it is finalized will you (or that Bozo Ted “Dollar Whore” Cruz) be informed what has been decided for you……..(1) 15 years in Government Affairs for Telco’s and ISP’s.

  52. Danielle Hann

    Just a thought framing the discussion. The telco’s aren’t extracting rent, their collecting a tax. Isn’t reducing taxes a pillar of the conservative agenda, no new taxes and all that.

  53. Steven Kane

    You know as a conceptual matter I agree, wholeheartedly. Hope and pray Tom Wheeler goes there.But I do enjoy watching my many silicon valley pals twist like pretzels arguing for government regulation while painstakingly avoiding using the words “government regulation.” Especially love that you call government regulation a “conservative idea” – somewhere Karl Rove is deep in thought… :D(Sometimes government regulation is a good thing, even a very good thing. There, I said it!)

  54. naiem

    I am paying money to Comcast to “bribe” corrupt politicians like senator Xz, to give Comcast the power to take my internet freedom! Should I stop using internet now to have free internet?

  55. Gregory Magarshak

    Obama’s got nothing to lose, and when it comes to tech he’s always been much more progressive. Witness, etc. Yes, was a flop as embarrassing as Apple Maps, and you’d think he would pay more attention to something that was so essential to his signature reform and legacy, but … oh well.But anyway, the Obama administration stance on tech is light years ahead of most people in Congress, and it’s sad. There are very few congresspeople like Zoe Lofgren, who tirelessly and patiently battled against SOPA and other nonsense. I guess being from Silicon Valley, Zoe getting it is something minimal we should expect. But reps from the rest of the country?Consider this … Congress had a 14% approval rating two months before the elections, and we’ve just re-elected the vast majority of incumbents. That says something serious about the way our democratic system works. And when it comes to policy that touches the internet, civil rights, and so forth, this becomes a big deal.…What to do? I don’t think there’s a clear answer. We recently had a study come out of Princeton that shows the US public policy is set by elites and special interest groups, and — to quote the academics who published it — “ordinary citizens have virtually no influence over what their government does in the United States”…Witness the three million emails sent to the FCC — more than on any other issue — and their inability to simply reclassify the internet as a Common Carrier Utility as it was before Bush’s reforms. The FCC has to vote on it, and then endure a lot of lawsuits from the big boys with deep pockets. That prospect wearies them more than hearing from 3 million regular folks. And besides that, we now have a class of “libertarian” shills who write cookie-cutter responses with phrases like “The most likely outcome is that regulators will freeze in place today’s business models, thereby slowing innovation and change. “:…Yeah, because a faster internet for everyone is what will slow down “innovation and change” at the telecoms, which at this point are virtual monopolies. It seems that the argument is always the same, but the model might be wrong.At the end of the day, I’ve come to notice a pattern. When Platforms became available as widely as possible, and when access was not guarded, that’s when the most wealth was created. Consider: the internet, email, the web, wordpress (powers 19% of the web), git, bitcoin, etc. I believe the next innovations will lie in decentralizing cellphones, power grids, finance, and other things that, until now, required large centralized players.

  56. Juande SantanderVela

    it would be good to know how much strength have incumbent telcos in each country, and how that correlates with speed… it seems that maximum broadband speed correlates inversely with the marketshare of incumbents.Also, how difficult is for new companies to reach the last mile determines the kind of services they kind provide.

  57. mdelvecchio

    let me paste you a little story about net neutrality:Think about Netflix. It has unlimited streaming movies now. Comcast has streaming movies too, at $4 per movie. What if Comcast tells Netflix “unless you pay us the equivalent of $20/user per month we are going to put you in the slow lane and your users won’t be able to stream.” NetFlix’s streaming business will be crushed. Comcast, Verizon and AT&T want Congress to allow them to do exactly that, and this is why net neutrality legislation is so important.This isn’t a result of a fertile imagination. This actually happened 100 years ago. Imagine the year is 1900. I run a steel company and you run a railroad. I sell steel for $50 per ton and you ship it for $3 per ton. I have two major competitors. I come to you and offer you $10 per ton for shipping if you agree not to carry steel for the other two. That number will give you far more profit for far less effort so you say yes. You’re happy. My two competitors cannot move steel from Pittsburgh to Kansas any other way (what, by horse and wagon?) so they go out of business, or a least their business is limited to local purchasers.Then I raise my steel price from $50 per ton to $75. The steel buyers have to pay because they have no other choice. The competition is gone. I make huge profits. I’m happy. You make huge profits. You’re happy. The consumers and my competitors aren’t happy, but who gives a flying f*** about them?This is the history of the railroad business in the late 1800s. This scenario played out again in the 1920s in trucking. Both times Congress mandated that any shipping company must charge identical amounts for all customers, based only on size, weight, and transit time.We have 100 years of success with net neutrality. It’s working pretty well….did commercial railcars vanish into antiquity? the trucking industry? nope, both are alive and profitable today.

  58. Adam Sher

    You see tiered access in the world of downloads (most commonly for content that appears on PirateBay or similar sites) and it sucks and applying this model across the internet would be a disaster.I read this article and this excellent explanation of Net Neutrality by the Oatmeal back-to-back.

  59. scottbarstow

    I don’t believe that the federal government simply enacting more regulation should be considered gutsy, and the chances that any government gets this policy right is almost nil, regardless of politics. I agree with your assertion re: Ted Cruz. I think his reaction is born of ignorance and simple bias.I would offer the following article from Martin Geddes, known by many in the telecom business as perhaps the most insightful thinker in the space, as a rebuttal to both sides of the current argument and a different way to frame the issue.

  60. K-Bob

    Now “gutsy” means more regulations. Great.I’ll bet some people still believe Social Security money they send to the Government all stays in a lock box, and government can’t touch it.This BS about faster channels is a solution in search of a problem. By the time the government “solves” the problem, it will have been solved so long ago by technology that “kids today” will wonder who these old geezers are talking about.Don’t like Comcast? Sign up with a wireless provider. It’s not as fast, but it’s not terrible. The biggest problem is bandwidth limits, and those are falling away. You can watch streaming HD over packet cellular networks. You can set up a neighborhood network with a few routers and hook it up to satellite services or buy your own line-of-sight connections to a distant provider.These are all “clunky” solutions, but they are so much better than they used to be that, in ten years, this entire issue will be completely moot.But the regulations, oh they’ll live on, just like every government agency that has long since eclipsed its original charter.

  61. thibauld

    It is true that US telcos need an incentive to improve their network and service and this incentive is “more competition”. As a french guy who moved to the US this year, I am still completely in shock with the prices of telecom here even though quality of service is nowhere near what it should be. Given this situation, it is very reasonable to assume that giving telcos the right to bypass net neutrality will change *nothing* except increasing US telcos’ wealth.Here is a good article on the topic that came out today on Venturebeat:

  62. bsbechtel

    I heard this report on NPR a few months back. It seem to have been forgotten or missed in the current discussion. I would be curious to hear others’ thoughts on it.

  63. Wesley

    “This is about keeping the Internet the way it has been operating for the past twenty years.” How so? By handing it over to the FCC to regulate? Awesome, so instead of markets solving such issues, where consumers have greater voice, we hand it over to politicians, who get sucked into the abyss of special interest hell. I’m sorry, but I agree generally with your end goals, but am greatly skeptical of your conclusion that adding internet to the list of highly regulated public utilities will result in improved experience for anybody. Also, I know you are in New York, but most of us in the US live outside of densely populated areas, so not real sure how Hong Kong, etc, are the best examples of how US lags in service. Is New York City as behind Hong Kong as the US average? Google’s fiber service, which is coming in waves, is also an example of how the private sector is superior to the government one-size-fits-all stuff that I think we are likely to see with government regulation. Look at what they did to the telecoms for so long. If you value innovation, I doubt very much that government is the solution. I think that is probably what Ted Cruz was saying (I’m not a fan, but giving him the benefit of the doubt here) – ie. Net Neutrality sounds good from Obama’s sound bites, but in the end, there is a high likelihood of bad unintended consequences that result in diminished innovation, service, etc.

  64. Mike O'Horo

    The list of things that Ted Cruz doesn’t understand, yet spouts off on anyway, is too long to review in this lifetime.

  65. Mike Belshe

    Surely the one thing we all (republicans and democrats) agree upon is that our government is not the “will of the people” but the will of those that lobby. Why would you hand the keys to our internet to a known, corrupt organization? Until we fix the corruption, do NOT give the government more power.

  66. Ellen Corwin

    ” I’m from the government and I’m here to help.”Don’t be stupid.

  67. Gregory Magarshak

    I’m a minarchist. I think the government should ensure people’s minimum expectations are met (safe potable water, low violence, 20MBPS internet, etc.) but that’s it. So I am not against “internet fast lanes” where consumers have to pay.That said, I think it’s just good policy to have the same for startups. A minimum level of protection (bankruptcy protection, as well keeping barriers to entry low) for new entrants. I think that on the level of Netflix, they should indeed pay for special agreements. After all — come on — Netflix does special peering agreements with Tier 1 ISPs and their traffic accounts for 34% of all traffic to consumers. So basically, I think the general principle is:REDISTRIBUTE THE ECONOMICS TO ENSURE THE MINIMUM LEVEL THAT MAINTAINS INNOVATION, FREEDOM, BASIC EXPECTATIONS, BUT BEYOND THAT, LET THE MARKET BE FREE (BARRING REGULATIONS TO MINIMIZE AGAINST NEGATIVE EXTERNALITIES).

  68. howardlindzon

    this is great…and sad…JP over in London tuned me on to Bruce Kushnik who has been covering this mess for decades. it is an atrocity http://www.huffingtonpost.c

  69. PrometheeFeu

    Charlie,The government funded research, but the Internet is the composite of a large number of companies which connect their networks together. That’s not the government’s doing.

  70. andyswan

    Specifically what government regulation are you referring to Charlie?

  71. pointsnfigures

    Internet regs are patterned after regs created for railroads, in 1887

  72. Pete Griffiths

    He’s absolutely right. Check the history.

  73. Tom Labus