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Net Neutrality: It's Pretty Simple, Really.
[June 30, 2006]

Net Neutrality: It's Pretty Simple, Really.


By David Sims
david@firstcoffee.biz

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.

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