The U.S. Senate this week is expected to debate network neutrality. What do you think? Scott Cleland, chairman of NETcompetition.org, which represents telecom and wireless companies and David Isenberg, a fellow at Harvard's Berkman Center for Internet and Society are online this week to discuss, debate and answer your comments.
<p>Hmm... maybe he should go
Hmm... maybe he should go looking through the kernel changelogs, or those for X.org, the exciting stuff happening over at freedesktop.org, etc. Red Hat pays the salary for a lot of the most active kernel and application developers.
But then this guy is just a suit, right?
It is NOT as simple as the simplistic appeal made by ILECs
(First, I have to figure out some new label for the big telecom players with a regulatory-based control fixation as their core business strategy. "ILECs" is admittedly passe and limited)
First, "offering premium services" in a zero-sum environment is worse than a straight line trade-off because every premium service client necessarily displaces _more_than_one_ standard service client and probably several. Further, business economics would most likely (given behavior patterns) mean that such providers would continue to downgrade the definition of standard service as more netowrk capacity is committed to premium service customers. Remember how when ILECs started offering ISDN, T-1 and then DSL, they claimed that a "voice grade" service is only gauranteed to provide throughput based on 9600 bps and made NO EFFORT to improve your service if your 56K modem was getting 19.2 Kbps ? That is a built in conflict of interest for them.
BUT I really don't want to tell the ILECs what they can do with their network, or what services they can offer. The problems are (1) that they frame this issue in terms of access, when they really will apply it to the backbone network; (2) they want to turn what they want into the rules that affect everyone, perpetuating the myth that they don't just own the PSTN but the concept and nature of communications; and (3) EVERY step of "de-regulating" the communications biz is really further, and more complex, regulation. De-regulating means removing regulations.
Ma Bell
Ma Bell had an un-American (and probably illegal) monoploy for over 100 years. During that time customer service was not in their vocabulary; indeed, one often felt as dealing with a royal family. It would seem they wish to continue toward the full British model and the current administration has done everything in support except to hold the coronation. If they were honest, the coronation would have already been held! Any student of history can point out the down side of the royal model: violent revolution.
To think it cannot happen again is to be incredibly stupid; that is the essence of evolution, punishment of the stupid.
Student of history?
During their "un-American" monopoly, AT&T invented fiber optics, the transistor, wireless communication, communication satellites, UNIX and thousands of other core technologies that put America way ahead in the technology race.
As a "student of history" I'm sure you remember that.
Re student of History
Yes in the all in the past. With 75% of North American Phds non US born and GM content to buy hybrid engine technology from Toyota, the US is begining to loose any technology advantage. The irony is of course, much of the research effort in the past was funded by government.
Black rotary phones
David you and I are old enough to remember the black rotary phone and the lack of innovation from the Monopoly.
It took Sprint deploying fiber to get AT&T to do it.
Do you remember that before the breakup of AT&T they spun off wireless in 1984 becuase they thought it only had the potential to be a niche market of maybe 1 million users in 2000. They were only off by a 200 million in 2006!
Am I reading this right. Are you really singing the praises of monoploy regulation? Was Congress which ended monopoly and promoted competition and deregulation in 1996 wrong?
Monopoly, TA 96, etc
Scott, the years when The Bell System was the best telephone system in the world were years characterized by not much change. I'd say they ended somewhere in the 70s, so I'm not disagreeing with you on black phones, fiber, etc.
But the 1996 Telecom Act did NOT promote sustainable competition -- why just look at the industry today, we have AT&T, Verizon and Comcast. That's not competition. And even so, they're having trouble staying alive . . . certainly when P/E=12, Wall Street is not optimistic.
So no, the 96 Telecom Act was not a success at promoting competition, or at reducing regulation, or at giving the U.S. the best possible network, or at helping the telcos succeed in business without really trying.
By the way, I'm not dead set against monopolies. I'm only against unregulated, colluding, tying, predatory monopolies. Regulated monopolies can work, witness roads, sewers, water companies, electric companies, etc.
Today we're faced with the problem that David Weinberger and I outlined in the Paradox of the Best Network http://netparadox.com. The Best Network -- defined as a stupid network at layers 0-3 -- is unsustainable under competition. So the telcos want the non-best network. And the Netheads want the telcos to keep giving us a reasonable approximation of the Best Network.
So we could corrupt the best network by eliminating its stupidity, that is, its neutrality. If we had a suboptimal network, we, the United States, would stand at a disadvantage to the rest of the world.
Alternatively, we could change the way the telecom industry works. Clearly we do not want a vertical monopoly like the old Bell System. But if we had a Layer Zero monopoly, a right-of-way Authority -- or perhaps a Layer One monopoly, a Wire and Spectrum Authority -- that was wisely regulated to provide nondiscriminatory access to all comers and make a cost-plus rate of return, maybe that'd work. But it would not be your father's telephone company, or your brother's. It'd be a Completely.
New. Thing.
And it'd be simpler than Network Neutrality.
But I'm not necessarily advocating that, I am only observing that (a) the telcos are antithetical to The Best Network, (b) especially when there's competition, (c) that monopolies are not bad per se but only when they behave illegally, (d) that the 96 Act did not decrease regulation or increase competition, (e) that today the telcos and cablecos are not sustainable in a network-neutral world, (f) we have the option of changing the demonstrably successful Internet so the telcos survive or (g) changing the demonstrably unsuccessful, non-competitive, non-innovative telcos so the Internet survives.
Competition imperfect but better than alternative
I agree that compeitive dynamics are antithetical to a monopoly mindset and that former monopolies have had a rocky transition to a competitive environment. But now that we have gotten through that painful transition, (where the Hundt FCC tried to play the invisible hand contibuting to the fiber and CLEC bubbles)technology is enabling increasing competition.
If these markets were trending towards monopoly we would see restriction of supply and prices increasing. The facts overwhelmingly show the exact opposite. Inter-modal competition is working and increasing. Is it perfect no. regulation and net neutrality aren't perfect either. NN confronts us with a choice of imperfect solutions. The imperfections of a two way supply and demand feedback loop, ie market forces or the imperfections of a one-way system where bureaucrats try and pick technologies and market winners and losers.
In a fast changing world monopolies are indeed bad. The reason our electrical grid is still stupid and can't detect an outage is that monopolies have little incentive or freedom to innovate and bring broadband over powerlines to all Americans. The potential energy savings of a smart broadband electrical grid are on the order of 20-30%!
I also disagree with your set-up that either the telcos or the Internet must die so the others can survive. they have both coexisted for over 13 years and I see little evidence of why that trajectory will change dramatically. Will the ecommerce giants continue to be able to maintain 80-90% gross profit margins in this more competitive market? no. Will the broadband companies keep all the customers they have today with more competition. no.
Competition is imperfect but vastly superior to the alternative.
Competition? I don't see no steenkin competition.
Scott, you say that we've made it over the hump and we now have competition. Yeah? 95% of US citizens have a choice of two or fewer broadband carriers. Most of us have only one. Don't give me that FCC Zip Code shuck; if there's DSL way over on the other side of my Zip Code, what am I going to do, move my house over there? Sorry, all I see is consolidation. The whole long distance sector is gone. Independent ISPs? Fuggedaboudit. CLEC? What's a CLEC? Now we have monopolies and duopolies. You call these monopolies "competitors"? You must've learned economics from a textbook entitled, _1984_ . . . you know, war-is-peace, freedom-is-slavery, monopoly-is-competition . . .
Oh, the "inter-modal competition" shuck? Like how many of us have Broadband over Power Line? Or muni wi-fi? How many of us think our cell phone is a *competitive* way to access the Internet? Answer: approximately zero percent.
static view
The classic way to support your pro-regulation position is to take a selective snap shot in time and say its not enough competition for me, the policy is failed lets regulate them all over again.
Moving from monopoly to competition has been a long and painful and imperfect process. Is it nirvana? no? is it vastly better than the alternative of government price regulation.
If you look at the progress of competition and the trajectory of change the competitive alternatives available to consumers continue to improve. take any time period and any slice of the market over the last few years and you will find americans with more competitive choices and falling prices. If you regulate now you will lose the benefits of competition people enjoy now and in future. Intermodal competition may be slower in coming but it clearly is. In about twenty years wireless became the dominant way people communicate supplanting the "monopoly" landline. Cable has more broadband customers than the Bells. Cable has lost 25 million customers to DBS. The hard evidence on the trends is obvious. We are living just fine with it now, why reverse course becuase its not "enough" at this arbitrary time?
As for concentration, you know that Bell consolidation is what the antitrust authorities call geographic extensions of a market. in laymans terms they aren't competitors so merging does not reduce competition.
You deride BPL. It is real. It works. It will be slow in coming becuase the utilities are regulated and have a regulated "mother may I mindset."
Wireless broadband competition is exploding. Verizon and sprint offer it already to most Americans, and cingular will soon be as well.
WiFi and Wimax and muni wifi are growing as well. whats not to like about the direction of these facts????