Net Neutrality: It's Pretty Simple, Really.

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Net Neutrality: It's Pretty Simple, Really.

By David Sims
 

The news as of the first coffee this morning, and the music is Creedence Clearwater Revival's Chronicle, probably the best greatest hits package ever assembled:

It's time to delve into net neutrality, see what yesterday's Senate committee vote meant, what portents of doom are portending and if Google of Yahoo! is going to win the bidding war for premium service the telecoms are slavering for.

The basics: Don't confuse the apples with the apple cart. Net neutrality is but one part of an omnibus legislation phone companies are keen to see get passed so they can start doing things like offering pay-television services in competition with cable companies, according to industry observer Amy Schatz:

"The Senate bill's main focus is creating a national video franchise system that would allow phone and cable companies to bypass the sometimes lengthy negotiations with local authorities over offering pay-television service," Schatz writes. "But the bill also contains a wide variety of other requirements, from antipiracy technologies for television broadcasts to changes in a federal fund that subsidizes phone services in rural areas."

In fact, in typical Congressional restraint, there are over 200 amendments. One vote yea or nay passes or kills the whole schmear, if you want to kill any one of the amendments you have to kill all of them, which means if you want net neutrality you have to do without competition for your pay-TV service and whatever the hell the other 199 amendments are -- marble and gold-plated bridges in Alaska that don't go anywhere, if Ted Stevens was in the room when it was being written.

If phone companies could wave a magic wand they'd have the whole kit 'n' caboodle passed, and get to open a bidding war between large Net users -- Amazon, Yahoo!, Google, all those XXX and online gambling services nobody ever actually hears about but which are by far and away the most profitable things on the Internet and which'd quietly get way, way more profitable for whoever owns the broadband.

The phone companies are grinning, cackling and drywashing their hands in anticipation. The Washington Post reported in December 2005 that William L. Smith, chief technology officer for Atlanta-based BellSouth Corp. told reporters and analysts that yeah, an Internet service provider such as his firm should, in fact, be able, for example, to charge Yahoo Inc. for the opportunity to have its search site load faster than that of Google Inc. A law allowing him to do so is a license to print money.

But they have to find some way to spin it like they give a crap about you the consumer, so in typical pretzel logic they're poormouthing about all the money they're having to invest -- billions! -- in upgrading everything to broadband, and who's gonna pay for all that? Of course you are. It's noteworthy that this argument is so threadbare that it only takes two logical jumps to get back to your wallet.

Craig Newmark, founder of Craig's List, recently held a Wall Street Journal Point-Counterpoint style debate with former Clinton press secretary Mike McCurry, where Newmark was pro-net neutrality and McCurry wanted to throw orphans out in the snow, evict grandmothers from their homes at midnight and outlaw ice cream.

Newmark pointed out that " I also work with some of their engineers, talking about the way big telecoms operate and issues like network capacity. It turns out that they have lots of unused capacity for bandwidth, but the big telecoms have been very remiss in implementing the newer Internet protocols (IPv6) required for growth, due to bureaucratic inertia."

In other words, running out of fiber anytime soon is not a problem. Newmark quotes an article Fiber Optic Association President Jim Hayes wrote on StreamingMedia.com in late 2004 saying "The backbone was terribly overbuilt… ninety-three percent of all the fiber that's been installed is still unused."

McCurry asked Newmark what the definition of "is" is.

That should settle the intellectual part of the debate, since "invest in broadband" is the only fig leaf the service providers can come up with to cover a naked money grab. What do they care what you think? You don't want to pay up? Fine, go read a book.

Ironically, it might be the phone companies' overarching greed that'll cost them with net neutrality. There are so many goodies stuffed in this Christmas stocking that the debate might break down over the sheer volume of it all, what with summer break coming up for Congress there simply might not be the time. Win the battle, lose the war.

It's rare First Coffee finds himself agreeing with RINOs like Sen. Olympia Snowe of Maine, but whoever writes her public statements uncorked a good one with "Net neutrality has been the founding principle of the Internet and has been the single greatest reason for its growth and its success." Ditto here.

After all, it's not like the phone companies invented the Internet, or even subsidized its early years, or have done anything but make money off it. They have tons of unused bandwidth lying around, do they expect us to believe their tatty excuses that they need more? No, I don't think they really do, they just need some mantra their bought and paid for legislators can repeat at press conferences. "Need to invest in more bandwidth" will do for the intellectually lazy, those who dig deeper, well, screw 'em. Who cares?

Uberdork Steve Forbes tut-tuts that net neutrality is a wolf in sheep's clothing, warning us that it will "stifle innovation." Which, of course, is the standard threadbare soundbite corporations always use when somebody might keep them from wringing every last dollar out of customers. Don't believe a word of it. Innovation is rarely the province of large corporations, it's almost always the little guys.

Honestly, the arguments the anti-fairness guys use are just plain stupid. Scott Cleland's the founder and president of Precursor LLC and chairman of NetCompetition.org. Incidentally, you can be almost 100% sure that anything which has to call itself "netcompetition" is pushing for anything but, that's why they have to try to snow you with the name. Remember the Democratic Republic of Germany, a.k.a. East Germany?

Anyway, UPI quotes Cleland as saying that Net-neutrality legislation would hinder broadband access providers' ability to offer more than one service. "How does a new entrant succeed? You differentiate and you innovate," he said. "(Net neutrality) is saying you have to have the same price, and the same terms and conditions."

I have no idea what the hell he's talking about, do you? That statement has absolutely no connection with any reality I'm aware of in the debate on whether megacorporations should be allowed to discriminate in supplying your Internet content based on who can stump up more cash. If Google outbids Yahoo!, well then Google loads faster and if you prefer using Yahoo!, go suck eggs, pal. Tough toenails.

What do differentiation and innovation have to do with that? Absolutely nothing, Cleland's just hoping you're too stupid to realize that.

Hal Singer, president of Criterion Economics, is someone else who thinks you have oatmeal for brains. First Coffee's almost always on the side of the free markets -- when it's a product or service that was developed via the free markets, which the Internet was not. The Internet was created and developed by the government and large research universities, about as far from the free market as you can get in America. The free market didn't develop it because it wasn't profitable to do so.

Now you can make a buck off the Internet, so the phone companies are blustering around like they took losses for years "innovating" and "differentiating" as they nursed the Internet along, and now they want to cash in on what's rightfully theirs.

Bushwa. If anybody should rightfully get to cash in off today's Internet it's the government, specifically the Department of Defense, not the Johnny- come- lately phone companies.

Anyway Singer claimed that a lot of the pro-Net neutrality talk is based on "misconceptions about what access providers want to do," according to UPI: "The debate suggests some anti-competitive motivation from access providers," he says.

Refer to the Smith quote above for why you can safely disregard anything else Singer, or anybody else who claims you can trust service providers, says.

Keep the net neutral.

If read off-site hit http://blog.tmcnet.com/telecom-crm/ for the fully-linked version. First CoffeeSM accepts no sponsored content.



Feedback for Net Neutrality: It's Pretty Simple, Really.

6 Comments

Innovation is rarely the province of large corporations, it's almost always the little guys.

Which is why the whole "OMG! Google is going to load slower!" is a red herring. Network providers and operators aren't that stupid. They know they can't predict the next big site, so why risk losing subscribers by slowing down sites?

I don't think the plan is to differentiate at that fine of a grain. I can see providers wishing to do it at the protocol level - VoIP gets a larger "chunk" of bandwidth than say web traffic. That can be made into a selling point, but saying some random website loads faster than with the other guy's network isn't.

The whole issue is confusing, at best, and dishonest at the worse. Reading the list of proponents of this bill is certainly enought, at least for me, to kill the whole idea of Net Neutrality: MoveOn.org. DailyKos, People for the American Way, and on and on of nearly 100% Leftisit/ Socialists.

How did the net get this far without a laundry list of laws and regulations coming out of Washington? You want a "level playing field", as the liberals constantly whine about, go to an ice rink!

David you are a caricature of America's fast-growing whiny entitlement culture.

Your argument is essentially this:

"I really like the internet and those guys make a lot of money so I should get whatever I want however I want it."

How about this David- THEY built the networks- THEY own them. I am sure if someone came to you decided they knew best how to manage a personal possession of yours you would throw a temper tantrum. But when it is to your supposed benefit you are all for it! If only we could all be so ignorant and hypocritical.

Putting aside the fact they OWN the networks, how about this: The solution you support will put a bunch of half-wit government bureaucrats in charge. The internet can be run like your local DMV- wouldn't that be great!! Not to mention the enormous corruption that will certainly follow in its wake.

Lastly, once it is established that whiney, entitled US citizens such as yourself can, on a whim, take the property of others or at least make significant restrictions on how others may run their business, NO ONE will ever invest 10 cents in another project, let alone $10 BILLLION dollars. Why take the risk?

Try to look past your own selfish entitlements and put a little thought into this issue-- or maybe move to Russia, they ran their entire nation in a manner you propose and look how well-off they are.

To Mr June 30, 2006 02:02 PM,

I'm a bit confused... you would like to give control over net traffic to the phone companies? The folks that compete (and are often losing) with many of the sites and features offered by the internet? Are you completely nuts?

C'mon man, get a grip. The amount of bandwidth one gets one pays for today via ones service provider, yes? That is what the phone companies should charge you for, whatever link speed you wish to pay for. Period. Done. They are making money, plenty of it. But you want to give them control way beyond that... full control over the traffic on the net. That gives them the ability to throttle any competitive traffic... hey, skype... no, they don't pay us so even though you have a 6 Meg DSL connection we'll throttle that skype traffic to an unusable speed... and since it doesn't then work well at tha speed we'll raise our regular phone rates because we know you have to use regular phone service again. Monopoly time.

They can charge you for your connection speed as they to today. Other than that their job is to insure you get that speed and they should NOT have any control over sites or traffic to sites in any way. That would be so wrong... it floors me to think you might actually be so lost.

Your ownership theory is pointless. What if there's one road that leads across the country and I own it. Additionally nobody else can build another road because I have a monopoly (can anyone build out an entirely new phone system wires and all?). I decide that it's now a toll road since I OWN it. Gosh, let me charge 1 million dollars to use my road... used to be regulated by the govm't where I could only charge enough, $5, to maintain my road and get a basic profit but now I'm fully in control. Hmmm... I can make money hand over foot now with no restrictions or controls! Yeehaw. That's what you are giving the phone companies. You think they'll be "nice" and make less money 'cuase they're all just in it for the consumer?

Please please read up on this my friend... David is pretty much right in that our politicians are bought and fairly useless and that this could destroy a great deal of innovation on the net. It would be no less than tragic.

Brady,

"Your ownership theory is pointless."

Ownership is pointless? I admire the fact you do not pull punches and establish your socialist credentials right off the bat.

"What if there's one road that leads across the country and I own it. Additionally nobody else can build another road because I have a monopoly (can anyone build out an entirely new phone system wires and all?)."

I assume you are trying to make an analogy here. You fail miserably. There isn't one 'internet' road, there are dozens. Additionally, there are no 'monopolies' any provider can connect into 'the net.'

"I decide that it's now a toll road since I OWN it. Gosh, let me charge 1 million dollars to use my road... used to be regulated by the govm't where I could only charge enough, $5, to maintain my road and get a basic profit but now I'm fully in control. Hmmm... I can make money hand over foot now with no restrictions or controls! "

No you can't. No one is going to drive on your road for 1 million dollars. Instead, someone is going to build a new road and charge more than $5 and significantly less than $1M and they will make a great profit. Also, BTW no one would drive on your 'regulated $5 road' because at $5 you could never afford to maintain your road so you let it go to shit. Google "NYC rent control slums".

"Yeehaw. That's what you are giving the phone companies. You think they'll be "nice" and make less money 'cuase they're all just in it for the consumer?"

First, we are not 'giving them' anything. THEY OWN IT.

Who ever said they are just in it for the consumer? Of course they aren't. They are in it for themselves, or to be more specific, their shareholders, like your company's pension fund or your mutual fund for example.

You are yet another product of the entitlement culture. You demand to work at your job for your personal satisfaction and enrichment and heaven forbid anyone interfere with that. However, anything you 'desire' you want to just take. Nice hypocrisy.

One last thing, back to your first point on how 'no one else can build' it. That is pure crap. Go to google news and search for the following:

google wireless projects
municipal wireless projects
cable voip
baby bell television
wimax

and on and on. Regulate the internet and a bunch of corrupt, half-wit politicians (we agree on that it seems) will 'control' the net instead. I am sure THAT would work out great!!

Brady,

"Your ownership theory is pointless."

Ownership is pointless? I admire the fact you do not pull punches and establish your socialist credentials right off the bat.

"What if there's one road that leads across the country and I own it. Additionally nobody else can build another road because I have a monopoly (can anyone build out an entirely new phone system wires and all?)."

I assume you are trying to make an analogy here. You fail miserably. There isn't one 'internet' road, there are dozens. Additionally, there are no 'monopolies' any provider can connect into 'the net.'

"I decide that it's now a toll road since I OWN it. Gosh, let me charge 1 million dollars to use my road... used to be regulated by the govm't where I could only charge enough, $5, to maintain my road and get a basic profit but now I'm fully in control. Hmmm... I can make money hand over foot now with no restrictions or controls! "

No you can't. No one is going to drive on your road for 1 million dollars. Instead, someone is going to build a new road and charge more than $5 and significantly less than $1M and they will make a great profit. Also, BTW no one would drive on your 'regulated $5 road' because at $5 you could never afford to maintain your road so you let it go to shit. Google "NYC rent control slums".

"Yeehaw. That's what you are giving the phone companies. You think they'll be "nice" and make less money 'cuase they're all just in it for the consumer?"

First, we are not 'giving them' anything. THEY OWN IT.

Who ever said they are just in it for the consumer? Of course they aren't. They are in it for themselves, or to be more specific, their shareholders, like your company's pension fund or your mutual fund for example.

You are yet another product of the entitlement culture. You demand to work at your job for your personal satisfaction and enrichment and heaven forbid anyone interfere with that. However, anything you 'desire' you want to just take. Nice hypocrisy.

One last thing, back to your first point on how 'no one else can build' it. That is pure crap. Go to google news and search for the following:

google wireless projects
municipal wireless projects
cable voip
baby bell television
wimax

and on and on. Regulate the internet and a bunch of corrupt, half-wit politicians (we agree on that it seems) will 'control' the net instead. I am sure THAT would work out great!!

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