Some Thoughts On Net Neutrality

Yesterday a federal appeals court declined to rehear a challenge to the Obama Administration’s Net Neutrality rules.  This was yet another victory for the fans of a neutral Internet, me included.

But Ajti Pai, the new FCC Chair, is hellbent to decimate these rules and everyone expects him to try to do just that.

Which led to a Twitter exchange with my friend Tom Evslin yesterday:

Tom argues that tightly regulating ISPs will only help incumbents and hurt innovators in the access sector. That has not been our experience. We have backed a number of alternative access providers, in fiber and in wireless, over the last few years and they are not struggling one bit with Net Neutrality regulations. They are struggling with all sorts of barriers that the incumbents have convinced elected officials to erect on their behalf.

The inability to use existing telephone poles that I mentioned on Twitter is just one of many of the things that the big telcos have done to stop innovative young companies from entering their business.

Here’s my thinking on Net Neutrality. We only need it because of the corruption that exists between large telcos and elected officials. If we had an entirely open playing field, we would not need regulations in the least. Competition would solve all of our problems. But not if you can’t compete.


Comments (Archived):

  1. William Mougayar

    “We only need it because of the corruption that exists between large telcos and elected officials.”Canada has so much in common with the US, on that statement & entire last paragraph. This results in price collusion, monopolies, blackmailing new entrants who want to innovate, higher prices, and lower service quality for consumers. It’s really bad. Hate is a big word, but I do not like our Canadian telcos either.

    1. Arnold Waldstein

      I will stick with hate on this one.

      1. pointsnfigures

        Who loves their telco? Who loves their bank? Who loves their airline? What major companies can you say their customers truly “love”? More than 50% of the population or more than 50% of their customers.

        1. awaldstein

          Fair enough and point well taken but there are of course exceptions.If I were to ask Lianna if there are any large brands she loves I am certain the answer would be Gilt as they do treat their customers with that as the result they target. Quite amazing actuallyFor me, the only large brand/corp/gov that I am infatuated is of course New York City which for all its many issues, love is the proper term.

          1. LE

            I am not sure that Gilt qualifies as a ‘large brand’ for the purpose of the parent comment.For me, the only large brand/corp/gov that I am infatuated is of course New York CityAll 5 boroughs (including Staten Island)? [1]Or just Manhattan and Brooklyn?[1] I remember when I started reading AVC that I think Fred even joked about traveling into Brooklyn.

          2. awaldstein

            Gilt is the real deal.NYC-brands are definitions they are belief systems. Where I play and where I was born matter to me but its definition as a place is unique to each person.

        2. William Mougayar


        3. LE

          What major companies can you say their customers truly “love”?I would say Apple comes close to that. But the thing is Apple (unlike airlines or banks) is close to a defacto monopoly. As a result there is enough profit to keep the vast majority of the customers happy in almost all cases. That cash is the key. Really. It’s a huge luxury brand as opposed to a niche luxury brand (which has competitors and can’t rape and pillage as easily).I also think most people are also ‘happy’ with Amazon. Who wasn’t profitable until recently for sure. But offsetting that was investment money that allowed them to be benevolent as well as essentially giving the shaft to (from what I read) vendors and employees. 4 legs, one has to give.By the way as I have said before ‘hate’ actually falls squarely on the mass of consumers that will make decisions based on price and tend to have little loyalty to the large companies (once again, en mass not talking about individual ‘schmucks’). As such they will buy and switch quite easily, at least for certain types of companies.

          1. pointsnfigures

            Amazon and Apple are lightly regulated.

          2. LE

            The three examples that you gave (Airlines, Telcos, Banks) all involved to a certain degree lives that are at stake if they are not watched in some way shape or form.Ditto for taxi cabs. May have ended up being a protected racket (medallions) but at the start it most likely had to do with protecting passengers.

          3. Joe Cardillo

            Maybe we’ve dabbled in this Q a ways back…but isn’t there always going to be an inherent conflict of interest when one corporation owns the first to last mile in any industry?I just can’t seem to imagine in net neutrality, banking, or airlines a scenario where there isn’t a regulatory baseline required, and the content (e.g. airplanes and people) has to be managed by someone other than the infrastructure provider. That’s what really bothers me about Comcast, is that they are in both businesses, and I don’t see them ever being that innovative because there’s no reason for it.

    2. Michael Elling

      So unfortunate for the country where 10 cent digital wireless was born! But the real reasons principally were: a) Canada never undertook the vertical separation of Bell and the other regional monopolies, and b) didn’t want to cede control to foreign providers.

  2. jason wright

    what’s in it for these elected officials that encourages this relationship of corruption with large telcos? i’m not precisely familiar with how in plain sight corruption works in American public Britain (‘UK’ seems not to have much currency these days) it’s called the ‘revolving door’,where the regulator later pops up on the board of regulated mega corp. sleazy cronyism abounds here.

    1. JimHirshfield

      Cash to get elected

      1. jason wright

        under the table?

        1. JimHirshfield

          Over the table

          1. pointsnfigures

            you forgot power.

          2. JimHirshfield

            Solar, wind, or coal?

          3. Twain Twain


          4. Twain Twain

            Coffee on keyboard!!!Theresa May says, “Nuclear means … nuclear.”

          5. jason wright

            so it’s formal. a cultural thing. interesting.

  3. JimHirshfield

    Artifacts of a prior era utility based sector?

    1. Michael Elling

      More like something time forgot, but the battles of 1890s-1930s for wired and wireless eerily similar to battles fought over last 2 decades. What’s the saying about those who forget history?

  4. Rob Underwood

    “The problem”, despite what my fellow liberals say, is not meritocracy or even competition. The problem is plutocracy — the rapidly accelerating fusion of governmental and corporate power we’re now witnessing.In my case – and this may be a point of disagreement with our host – the wake up call was Atlantic Yards (now the Barclays Center) The city and state government, together with a private corporation and a big investment bank, portrayed a thriving residential neighborhood – my neighborhood of Prospect Heights and North Park Slope – as an urban hellscape that could only be saved from itself through benevolence of the plutocrats and their “jobs” (selling beer), “(affordable) housing” (which turned out to be mostly luxury housing), and “hoops” (a very bad team) that required eminent domain and the leveling of our homes and businesses.As the big telecoms write the rules for Mr. Pai – regulatory captured before he even started his post- we now see the plutocracy writ larger still than just a few blocks in Brooklyn.What briefly animated a brief detent between the Tea Party and Occupy Wall Street in both movements’ early days was a realization that while they are opposite ends of the X axis (economic freedom) of the Nolan Chart (… they both exist on the same end of the y-axis that represents personal freedom in the face of statism and plutocracy.I hope more people recognize that the corruption and plutocracy made evident by policies such as those of our new FCC chair represent a grave existential threat to not only businesses, including start-ups, but also our nation as a whole.

    1. Tom Evslin

      20 years ago the telcos – who generally had captured the FCC which regulated them, tried to used regulation to strangle competition for the Internet. Clinton’s FCC wisely decided NOT to apply title II (legacy telco regulation) to the Internet. It flourished. see…. the Internet flourished.I would argue that the imposition of Title 2 on Internet access is an example of the corrupting influence of lobbyists and big donors. This time the influencers were members of the Internet Association – virtually all the web giants (who had been for an unregulated Internet before they became giants). Is Google less a dominant player than Verizon?I agree with you that regulators will almost always be captured by those they regulate. That’s an argument for a minimum of regulation. It’s good that Chairman Pai wants to give up the ability to micromanage the Internet. It removes temptation from his or future FCCs to give in to pressure and use that regulatory power to favor big donors.

      1. Michael Elling

        I wrote here vis a vis their closed fiber systems why Google would want to prevent Web 4.0. But that doesn’t mean Pai’s decision is sound. The problem with net neutrality is that it was a farcical convention to begin with, one which didn’t truly address equal access, nor propose any type of settlement model that is necessary to sustain “inter-networks”.

    2. jvill

      From a fellow resident of Prospect Heights, I share your frustration. Watching our neighborhood stores, homes and establishments get leveled so they can put up passionless prefab luxury housing and another Starbucks has changed the character of the community against the will of the community. But those people just know better, we’re told…

      1. Rob Underwood

        It was crooked crooked crooked from the very start, and that’s saying something in the crucible of crooked real estate deals that is New York City.I lived in 475 Dean Street. The paint was literally not even dry on the new condos built at 24 6th Ave and 636 Pacific (Daniel Goldstein’s building) when the plan was announced.Almost no one – including the NY Times who were having their own building built by Forest City Ratner at the time – took the time to do actual reporting on the blocks to discover that so many buildings had just been renovated and sold off as housing. Our blocks were not urban blight – they were cherished homes and small businesses. The result was brand new condos, especially on the block bound by Pacific, 6th, Dean, and Flatbush being torn down to build other brand new condos.It’s also worth noting that the state ended up taking the LOW bid – Ratners’ $100M vs. Extell’s $150M – for the development rights.…. If you’ve not seen Battle for Brooklyn (…, do.Anyway, I knew already that our host and I don’t see eye to eye on the Barclays’ Center, and I don’t want to sabotage today’s discussion into a NYC real estate discussion. My wider point was that Atlantic Yards really opened my eyes to the degree to which large corporations and our government, too often enabled by media outlets like the Times, have now fused into a singular power structure that stands in opposition to democracy, freedom, and the will of the people. Mr. Pai appears to be part of this power structure that believes in a strong central power structure controlled by only the most wealthy among us – a neoliberal noblesse oblige if you will. That’s what must be resisted.

        1. LE

          too often enabled by media outlets like the TimesTimes RE section is one of the few profit centers they have. They are all about RE in NYC with a few occasional ‘to be sure’ articles to appear to be fair and balanced.really opened my eyes to the degree to which large corporations and our government, too often enabled by media outlets like the Times, have now fused into a singular power structure that stands in opposition to democracy, freedom, and the will of the peopleTo boil this down to the simplest of concepts: This happens simply because those with money typically have the ability to hire and pay for those who can and do game the system that is out there. Resistance is probably futile in all honesty. They manipulations and the skill is quite impressive you’d have to agree as much as you find it distasteful you have to understand that its a sophisticated game just like any sport.

        2. Twain Twain

          Thanks for sharing this, Rob. I’ve walked past Barclays Center many a time and had no idea of the background to its build.

          1. Rob Underwood

            Battle for Brooklyn, the movie about Atlantic Yards (the Barclays Center), and the opposition to it in particular, was short listed for an Academy Award. It’s worth watching especially if you are in the area often —….I could talk at length about the fight but will leave it there given the discussion today is about Net Neutrality. Suffice it to say that it, along with getting more CS in Brooklyn schools (something about which our host and I do agree on) are what motivated by getting active in Brooklyn politics a bit (mostly the Community Board).

    3. JamesHRH

      Its almost like the American people recognized this and threw a wrench into the workings of this plutocracy…….by electing the current President. They have to be disappointed by how he has wiped his hands of DC’s dysfuntion.It’s a shame The Prez is so self oriented…..a younger, service oriented President would be 1600 types of pissed by the current state of affairs. That type of guy would be a real hellion. You know, promising Hope and then, well, raising hell until things got better.Turns out that almost everybody who runs for President just wants to be President. They end up doing fuck all.Obama (Hey! How’s Richard Branson doing? WTF?)and Trump a little more alike than I realized.

      1. Rob Underwood

        I do think the rapidly increasingly awareness of plutocracy animated the President’s ascension, but that’s highly ironic given he himself is a product of the NYC real estate industry, the ground zero of plutocracy going back to Robert Moses.Sounds now like the President wants a government shutdown, so that may be one way to turn down the knob on at least the gov’t portion of plutocracy –

      2. sigmaalgebra

        IMHO Trump is terrific, but like books need to understand before liking.First have to understand that the (A) Democrats, the (B) anti-Trump Republicans, and essentially all of the (C) MSM would like to see Trump hung, on the rack, drawn, quartered, and handed over to ISIS.Why? Because he and is supporters are not any of the (A)-(C). But, Trump won, in the Electoral College and, by rumor, would win the popular vote now.He won, in part played it like a game, played to win, won the game, and won by being one smart cookie, much smarter than the average bear or cookie. Proof? Did I mention he won? Won against 16 Republicans and (A) and (B). YouTube is packed with video clips of predictions by the best of the MSM pundits that Trump had no chance — Hannity plays such clips over and over. Smart cookie. QEDIMHO, Hillary and Co., with all their advantages, especially the Hillary Propaganda Machine, a.k.a. the MSM,were not nearly as smart cookies — in too many ways really stupid, shoot themselves in the feet, gut, and between their ears total idiot cookies. Trump’s remark was correct: In short, in one word she belonged in JAIL. Still does.IMHO, Trump’s main objective is to leave the country much better — and the world enough better not to get in the way of getting the country much better — for his kids and grand kids and then all the other US kids, grand kids, citizens, soldiers, etc.In particular, Trump really is going for the people who came to his rallies, heavily in the flyover states, really the states where he won big and the states where he campaigned big to win not so big.Immigration? He’s going to enforce the long standing laws, policies, and procedures for just the reasons they were started and have been long standing. The open borders crowd will long be pissed and screaming like some toddler too fat having his too many cookies taken from him, say, like Chubby in Ping Pong Yang losing his French cheese, ice cream, and butter. Tough cookie: We’re going back to our old immigration system. Capiche? Or just what is it so difficult to understand about enforcing our long standing laws?To help enforce our laws, and slow drug trafficking, crime gangs, human trafficking, along appropriate places on our southern border build a high wall with plenty of cameras, other sensors, etc. Yes, from whatever means — taxes, tariffs, duties, import licenses, handling fees, emoluments, money transfer fees — have Mexico pay for the wall.The Economy. Get a lot of our 85+ million people able to work back to work, thus, in effect, producing more for them and everyone else. No, the Democrats did not find a way for the US to be strong and wealthy by having ballpark 25% of our labor force sitting sitting on cheap, imported plastic porch chairs doing a self-administered proctology exam.Foreign Trade: No more $800 billion a year trade deficit, $500 billion just with China. Ross Perot was correct: NAFTA would be a giant sucking sound moving companies and jobs south of the US border. So, instead of trade out of balance, do more “Make American. Hire American. Buy American” or some such.Taxes. Try to go along with what is said to be the good examples of JFK’s Walter Heller and Reagan on how to cut taxes and soon increase economic activity and revenues enough to pay for that. Sure, I’d like to see the solid macroeconomic details except I understand that the set of all such solid details are a subset of the empty set. But, make it no longer a sin for US companies to make money.Foreign Wars. No more dumping dirty dictators to build DC style democracies — dumb, delusional, dysfunctional, destructive, dangerous, dog poop. W totally failed to get it. Maybe if W’d gone to Viet Nam instead of just stayed in Texas playing with beer, women, and airplanes he would have understood.In Akrapistan, hopefully soon Trump and Tillerson will clearly understand that we really can devastate the Taliban, set up a secular government in Kabul, and leave. Then they will soon come to realize that the government in Kabul has a very small audience outside of a radius of a few miles, that the Mullahs are still there and have a devoted audience of essentially all the country, that Islam will be 99 44/100% of the culture and will run everything from dress codes, architecture, diet, marriages, social norms, the media, the police, the legal system, the economy, foreign policy, the military, and religion. Then soon Islam will also run the government everywhere but in Kabul and soon then also in Kabul. Then soon Akrapistan will be a base for radical Islamic terrorism.Net, we can defend ourselves from Akrapistan, but we can’t civilize it — same situation for nearly all of the Islamic world. Same situation for immigration: Can take a Muslim out of the Islamic world, but can’t take Islam out of the Muslim. All radical Islamic terrorists are Muslims, and so far too many Muslims are radical Islamic terrorists. Sorry, the US Constitution just does NOT apply to people outside the US and not US citizens who want to come to the US.So, we’re returning to a merit based immigration system, and we will have a heck of a hard time finding anyone from an Islamic country that can pass the test of merit.For the many total toilet case countries in the world, we will not try to clean them up, civilize them, democratize them, or make them like us. Instead we will have our military strength deter them and we will defend ourselves against them.The Environment. We will have clean water and air, protect our parks, forests, lakes, rivers, etc., regulate were necessary, but get rid of quasi-religious wackos in the EPA, cut the budgets keeping the climate alarmist scam going, and f’get about climate change.Energy. North America will be energy independent, with cheap, clean energy, all of the above, whatever works, e.g., drill, Baby, drill. We will also be self sufficient or nearly so in steel and aluminum.Health Care. Let no one go without needed health care. Have everyone who can afford to pay for their own health care do so via market based health care and insurance. Do address the issue of pre-existing conditions for the whole country (formerly handled by community rating in the richest states). Continue Medicare. Send Medicaid back to the states with block grant money. Note: We still have Hill-Burton hospitals. Do NOT try to go to massive cost shifting or single payer.If Sandra really wants a nose job and to have her tatoos removed, then she will have to find the money herself or pay for an medical insurance plan that will cover that!That’s describes the theme.All of the above, fine with me.But the MSM will mostly continue to distort, lie, push made-up, cooked-up, stirred-up, gang-up, pile-on, fake news attacks on Trump as hard as they can.Mostly the MSM will go out of business and be replaced by Internet sites, whatever people want to see. hear, read, learn.Paul Ryan? He has some people who give money to his PAC; he uses the PAC to support the campaigns of some Congressmen; those Congressmen vote Ryan for Speaker; as Speaker Ryan tries to do favors for the money. So, on each issue, Ryan tries to do what his backers want. In this way, Ryan does a lot of really stupid stuff. On each issue, he will do that for a while, tell his backers that he’s done all he can, and then get back to work on reality. But, on each issue, we have to give some of the Congressmen their opportunities to try to please their backers before they get back to reality.Trump’s doing fine. He stands to be the best POTUS since …, uh, …, way back there.And guess who will be the first female POTUS, maybe to follow her dad?

    4. sigmaalgebra

      You lost me; put less delicately, I have to flush what you wrote. You might be right, and I’d like to know. But to believe you, I need much more information.YourMr. Pai – regulatory captured before he even started his postmight be fully correct, but I’d need to know.But, more generally, to argue his bad policies, it is much easier just to argue directly why his policies are bad and not argue indirectly that he is bad and, thus, his policies are bad. Maybe he is bad and maybe not; maybe he is kind/mean to kittens and puppies, but for his bad policies, explain his policies and why they are bad.I tend to agree with your stance: My 50,000 foot view is that Bell did so well for so many years as a regulated monopoly with so many lawyers and lobbyists that after deregulation they stayed with the lawyers and lobbyists. My guess is that the Baby Bells still feel, like many children born rich, entitled.Certainly for my startup I want some strong version of net neutrality, and I’m plenty eager to fire up my text editor, type some hot text into Knuth’s TeX, convert that to file types DVI and PDF, and, using the ability of Adobe Acrobat to write to my FAX modem, send the results to my representatives, White House down to court house.And, sure, since I’m in NYS, I can send to, right, the big buddy of Nasty Nancy (The San Francisco Treat), Maxine (impeach Trump now) Waters, Al (Frankenbrain) Franken, …, Chucky (dry his tears and wash and raise his glasses) Schumer before the Democrat Party concludes (not much chance, actually) that he is a train wreck.And, in particular just now, we very much need to be sure that the smoke about net neutrality is not just some pro-Obama (the guy hates the US and is still laughing at how he got away with it, hurting the US so much, and got rich doing it), anti-Trump, cooked-up, made-up, stirred-up, fake news, distorted, lying MSM Democrat Party propaganda, e.g., shooting everything Trump tries to do in the gut, even if he has a flock of geese on the White House south lawn each laying each day a clutch of two pound golden eggs.The MSM and Schumer would prefer to burn down the whole US before letting Trump do anything, especially anything good; then Schumer, Nasty Nancy, etc. could get what they want — rebuild the whole US from a burned out wasteland directly from DC as the centralized, regulated, socialistic, dream world they got from too many NYC socialists and Communists. Let’s get any (if it exists) or all this political septic tank overflow off the table and out of the picture and concentrate on the actual issues of net neutrality, directly.Let’s get the net neutrality issue out on the table, its clothes off, looking at the details, using MRI or whatever, understand this sick puppy, and get done what needs to be done.The last mile should be regulated as a common carrier? I don’t know. I don’t want UGE Corporation putting bottlenecks, doing rent seeking, manipulating the laws and regulations, etc. for my Internet data between my server farm and the backbone or wherever on the Internet. If my last mile ISP has thin profit margins and is slow to raise data rates, QoS, and reliability, maybe that should be fine with me.Let’s get this — this plumbing — worked out and then get on to other things.

      1. Michael Elling

        tldr; Rob is more correct than not (about Pai and other things).

    5. Michael Elling

      The fight is between a centralized, horizontally scaled model (which tends towards vertical completeness and near-monopoly) vs a decentralized, vertically scaled oligopoly model which relies(d) on settlements (and interconnection). See my broader comment under Tom Evslin.The key is where the interconnection should be and of what form, as well as the role and level of the settlements (which are anathema to the 4 layer IP stack folks; aka the internet or net neutrality folks).There is a hint of what you are saying to draw on from Brooklyn Yards, but the reality is that neither side stands on firm ground in this debate. And maybe that’s apropos given that Brooklyn, along with the rest of LI, is one big glacial garbage dump.

  5. pointsnfigures

    I love competition, especially transparent competition. But, turning business over to competition also means more freedom-and getting more freedom is scary to people. It would be helpful if people truly understood this research by Professor George Stigler: https://research.chicagoboo… Regulatory capture is real and it’s practiced in all industries by big incumbents. There is only one way to get rid of it-get rid of a lot of the regulation. A lot of internet regulation is based on 1930’s regulation of phone companies. A lot of farming, banking, energy, manufacturing regulation has its roots back to the 1930s when we started to regulate the industrialized economy. If today’s “electronic/information economy” is going to replace large swaths of the industrialized economy it’s time we gored a lot of the sacred cows governing it.

    1. Rob Larson

      I agree with this in principle – the best option would be to strip out the accumulated regulation that isn’t helping, which is likely the vast majority of it. But if that isn’t politically possible, maybe NN is the next best option as a counter-measure?

  6. Rob Larson

    Fred, that’s the best argument for net neutrality I’ve ever read. Although I’m attracted to the values that NN proponents point to, I’ve always been skeptical about the wisdom of turning to additional regulation to get there, rather than relying on market forces, given the historical tendency of regulation to favor large incumbents and stifle innovation. But if the free market is already jammed up by a nest of incumbent-favoring regulations, then maybe that option isn’t available.

  7. Tom Evslin

    Fred,I think the grand compromise you suggest is a good one. Wherever specialprivilege exists for large ISPs, it should be removed. Access to towers, poles,and conduits is especially important and appropriate given that these are oftenin a public right of way. Complicating the issue is that these are subject tostate-by-state jurisdiction and poles, for example, may belong to the localelectric company. There should be no laws against municipal broadband; but thisis also a state issue and voters need to be sure they know what they’re payingfor.Applying 1935 regulations to ISPS as a way to achieve the laudable goal of NetNeutrality is a very dangerous non-solution IMO. Regulations are written forthe past and innovators often need to innovate in ways those rules nevercontemplated – exactly what happened with VoIP and the telcos duly attempted tostrangle it with regulation. We won that battle when Reed Hundt, Clinton’s FCCChair, and the rest of the commission decided that the Internet – even if itcarried voice – was a data service. The FCC continued that policy, which Googlethen supported, until 2015 when it declared all of Internet access- not justVoIP, to be a basic telecommunication service subject to FCC micromanagement.Now Google and the Internet Association, lobbying arm of web giants, favorsthis regulation. It is true that ISPs do want to compete in search and contentdelivery. But does, Google, much more dominant in its field than any telco needprotection? I think they’ll regret asking for it. The next demand will be that searchbe regulated to make sure search results are “neutral”. After all, how can theInternet be neutral if the search engine which are the front door are biasedeither commercially or politically? Should browsers like Chrome, which see ourbits before they even get to the Internet, be regulated? Slippery slope. See….If Google doesn’tneed protection, do we? Members of the Internet Association say they couldafford to pay for “fast lanes” if the ISPs decided to impose such charges butstartups couldn’t. These are crocodile tears. Google, Amazon, et al alreadyhave private networks connecting to the Internet at many different points andlocal data caches (virtual bit warehouses) to assure that their pages popupfast everywhere. If you host on Amazon, you pay more if you are hosted atmultiple sites (you are paying for speed!). A startup can’t build their ownnetwork; but ISPs could rent them similar results. I think the giants don’twant competition either from the ISPs OR the startups. See….Finally, it’s hard for me to see why anyone – especially members of the “resistance” – would want presidential appointees (the FCC) regulating their access to the Internet. To his credit Chairman Pai, originally appointed as commissioner by Obama and appointed chair by Trump. Is trying to give that power back. But, as you say, we should do allwe can to assure that no part of the Internet – including local access – is acompetition-free zone.

    1. Michael Elling

      There have been two battles since the 1890s: interconnection and universal service. In 1913 Vail promised to provide the latter so as not to submit to the former. MaBell didn’t deliver. 1934 was an attempt to correct that. But the subsides captured via access charges and regulated line pricing (from commercial to consumer, from urban to rural) became politicized over time and inefficiently high as the MaBell monopoly refused to embrace the (digital) technology and pricing it created. The ultimate NIH irony.1984 changed all that. The US created a competitive WAN and retained a monopoly MAN. The only regime to do so. The result was the internet. Thankfully in wireless MAN they took a more competitive approach with 5-7 licensees in each market (now pretty much 4) and supported unlicensed spectrum (aka shared or freely interconnected or re-used spectrum loosely regulated by power control). But note they tore all the spectrum up only to see market and network effects forces pull them all back together.The result, in pricing terms, is the internet we know today. There’s obviously much more to include, but we need to understand that the competitive WAN and resulting monopoly MAN flat-rate pricing were the pricing cornerstones of the internet. Later it was helped along by the massively scaled and competitive flat rate pricing of the mobile providers by the early 2000s. Those 3 things are what separated the US from RoW; hence our commercial ascendance in the medium.Importantly, while the Republican FCC reversed 1984 and policy swung to a bill and keep, settlement free model by 2005, Steve Jobs single handedly resurrected equal access (aka interconnection) in the mobile device in 2007; otherwise the smartphone revolution wouldn’t have experienced the enormous push-pull network effects. Once again the US dominated due to intended and unintended pricing and interconnection issues.From this 30 or 120+ year history there are two important takeaways: the importance of interconnection as far out to the edge and down in the stack as is economically possible AND balanced settlements north-south (app to infrastructure) and east-west (between actors/networks/companies, etc…). The latter violates net neutrality but I’m not concerned as the term was coined by two liberal professors who didn’t understand the full extent of the voice interconnection and pricing reforms (fixed and mobile) of the 1980-90s.Our policy should be guided by these two issues: interconnection and settlements. And given the enormous opportunity with IoT and 4K (2-way) video everywhere there are relatively easy ways for the market to achieve this with current technology on its own. Just takes a little software, marketing and inverting the business model mindset.

  8. DJL

    If we adopt regulations as a response to government corruption – we would legislate ourselves into gridlock. While I understand the problem, I’m not sure more legislation is the answer. Breaking the connection between politicians and lobbyists (K Street) would be where I would swing the ax. Laws are written by lobbyists and fed to Congress. Sad state of affairs.

    1. fredwilson

      we’ve already adopted it. i am proposing a grand bargain. we will give up our regulation if the telcos give up all the special protections they have bought with steak dinners and worse

      1. DJL

        Understood – and it makes perfect sense in this case. I was referring to the general idea of justifying regulation to address corruption. Not sure how you even interject a common-sense solution into this space.

      2. PhilipSugar

        Could not agree more.

  9. LE

    The inability to use existing telephone poles that I mentioned on Twitter is just one of many of the things that the big telcos have done to stop innovative young companies from entering their business.What’s interesting is that cable companies didn’t have this issue. This dates back from a time when they were not threats to telcos and the telcos had a monopoly (pre ’85). And there was no fear of any competition. You would think that in any battle to use the poles it would have been contractually written in (or agreed to in some way since I don’t know how this ‘went down’) that those cable lines could only be used to transmit television and not audio phone conversations (which they of course are used for).

    1. Michael Elling

      What’s interesting is that cable companies didn’t have this issue.Not true. Ask Tom Wheeler. Look up “Wheeler cable telephone poles”

  10. LE

    We only need it because of the corruption that exists between large telcos and elected officials.’Corruption’ is not the correct word to use here. Not by the legal or generally accepted definition. Not in this context. If there is true legal corruption going on here and laws that are being broken that is a different issue than people using legal means to hire lawyers and consultants to win the game.

  11. John Willkie

    Net neutrality is to telephone pole attachment rules what fish are to bicycles.

    1. Michael Elling

      How do you define interconnection?

  12. Frank W. Miller

    Tucows is Layer 3 and above. The telcos are mainly Layers 1 and 2 with some Layer 3 sprinkled in to make it all work. I don’t see the conflict? I certainly don’t see how Tucows is affected by the telcos not allowing access to their poles.

    1. Michael Elling

      Not their community fiber systems. Layer 1.

      1. Frank W. Miller

        Ah, that makes more sense then. We had the same desires in the late 90s building telco gear. God, if we could just get our stuff out on the poles!!The telcos would rather march right into the 9th circle of hell than give up the poles. They’ll burn their companies down first. It isn’t going to happen.

  13. Michael Elling

    No corruption. Just lack of understanding of network effects and myopic thinking that leads to local vs central or states vs federal rights thinking. In all networks value gravitates to the core and top and costs are disproportionately borne at the edge and bottom. So who should rule? The core or the edge? The top or bottom? See elsewhere under Tom Evslin my points about interconnections and settlements.But as in any situation where one does not truly bear risk (ie government spending and/or lack of accountability) poor decisions influenced by cronyism and shady dealings appear all too often. That’s the case for local rights of way licensing. Of course, once a monopoly license is granted and it is tied to fees it is very hard for a municipality (or central govt) to change that.

  14. Pascal Aschwanden

    The big Telcos know they can’t compete fairly against anyone, so they’ll prevent competition at all costs. All the corruption between politicians and ISPs is risk mitigation against the threat of fair competition.

  15. Prokofy

    Re: “We only need it because of the corruption that exists between large telcos and elected officials.” Corruption? Or democracy? Google and Facebook hate telcos, their natural competitors. The FCC regulations under Obama favoring “net neutrality” were decided by executive fiat by professors, techies, and of course that big multi-million-dollar Obama campaign bundler, Chairman Genachowski. There will continue to be a war over these resources until legislation democratically passed by Congress decides. I don’t see why we must foot the bill for Google to have free work tools.