My Press Release on FCC’s Proposed Preemptive Regulation of the Internet
September 21, 2009
FOR IMMEDIATE RELEASE
September 21, 2009
Contact: Scott Cleland
703-217-2407
NetCompetition.org Comments on Proposed FCC Preemptive Regulation of the Internet
FCC Risks Killing the Golden Goose of the Internet – Mutual Self-Interest and Cooperation
WASHINGTON – In response to the Federal Communications Commission Chairman Julius Genachowski’s call today for preemptive regulation of the Internet, NetCompetition.org Chairman Scott Cleland offered three comments for attribution:
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“The FCC risks killing the proverbial Internet Goose that lays the golden eggs. The productive basis of the Internet is mutual self interest, unforced cooperation, and inclusive incentives; however, forcing special outcomes for the first time via regulatory fiat could do just the opposite – it could diverge mutual interests, discourage cooperation, and exclude networks from the Internet freedom to innovate and invest.”
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“New unnecessary and divisive regulation of the Internet could needlessly balkanize an essential American engine of economic growth and job creation.”
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“For the first time in fifteen years since the privatization of the Internet, formal FCC net neutrality regulation effectively could takeover the role of the Internet Engineering Task Force’s consensus-driven process ‘to make the Internet work better’– by having one government unilaterally dictate what Internet protocols and architecture designs are permitted.”
NETCompetition.org is a pro-competition e-forum representing broadband interests. See www.netcompetition.org.
Wireless Innovation Regulation — “Believe it or Not!”
September 18, 2009
With due to credit to “Ripley’s Believe it or Not!®,” so much odd and bizarre is happening in Washington in the “name” of “wireless innovation” and competition that the topic calls for its own collection of: “Believe it or Not!®” oddities.
Skype co-founder Niklas Zennstom, the co-founder of illegal-music-downloading site Kazaa, who had to avoid entering the U.S. because of copyright-infringement liability… is now seeking a U.S. court injunction to shut down eBay’s Skype for alleged copyright violations!
Amazon, a leading proponent of net neutrality legislation to ban Internet providers from blocking any content, abruptly removed without permission, thousands of copies of George Orwell‘s books from Kindle reading devices… just like “Big Brother” would have done in “Nineteen Eighty Four“!
eBay’s Skype phone service, which is being sued for violating property rights… petitioned the FCC for Carterfone regulations to allow Skype to use competitors’ valuable privately-licensed spectrum for free!
In letters to the FCC from Apple, AT&T and Google about whether Apple was “open” in rejecting the Google Voice app… only Google requested that parts of its letter remain secret from the public!
The No Chokepoints Coalition is asking the FCC to price regulate increasingly obsolete copper special access connections… when competitors are routinely deploying better wireless and fiber backhaul alternatives!
Google, which sells its own branded smartphone, operating system and app store that competes directly with Apple… claims Apple is anti-competitive for not unilaterally surrendering its iconic iphone software design to Google!
The DOJ Antitrust Division is reportedly investigating whether the texting market is anti-competitive… when users send ~billion texts a day for about a penny a piece down from three pennies a piece a few years ago!
Google says that Google Voice, which is a voice IP application, is not technically a “Voice over IP” (VOIP) service that legally must contribute its fair share to fund Universal Service… because that might imply Google could have an obligation to help fund universal broadband service as the biggest user and beneficiary of IP bandwidth!
Rural carriers are claiming handset exclusivity deals are anti-competitive because the highest-end luxury smartphones are not sold directly in rural areas… when in fact very few luxury goods and services are marketed and sold directly in rural areas because it is uneconomic!
Google, with over 95% share of mobile searches per StatCounter, claims Apple’s #2 iphone, with ~23% smartphone market share is anticompetitive for not carrying Google Voice!
The U.S. wireless industry, with 4 national competitors, 7 competitive operating systems, 633 handset choices, thousands of mobile application choices, and with users who enjoy the most usage and the second lowest average prices in the world… is being investigated by the FCC and DOJ for not being competitive!
Strange but true.
“Believe it or Not!®”
An Excellent Op-Ed on Net Neutrality
September 16, 2009
Matt Salmon, immediate past president of COMPTEL and former Arizona Congressman, has an excellent Op-Ed in today’s Washington Examiner entitled:
“Net Neutrality Threatens the Balance of the Internet.”
OECD’s Self-Serving Metrics
September 16, 2009
George Ford of the Phoenix Center does a great job of debunking the OECD’s latest self-serving set of metrics covering mobile prices in his latest research piece: “Be careful what you ask for: a comment on the OECD’s mobile price metrics.“
The OECD’s mobile metric approach reminds me of the old adage that you can get statistics to say anything you want — if you beat them up enough. As George’s white paper shows, the OECD had to really work over the data to get it to reach the upside-down conclusion that Europe’s average wireless prices are lower than the U.S.
First, the OECD ignored the pesky notion of overall wireless usage, because if they looked at usage they would have to include the pesky fact that Americans use massively more wireless minutes of use than their European counterparts — roughly 2-6 times more depending on the country.
Second, ignoring usage allows the OECD to ignore economics and common sense, because if people were told Americans use the most wireless minutes of use, someone might obviously connect-the-dots of supply & demand and conclude that Americans’ more minutes of use are a result of lower average prices than other countries.
Third, George pointed out that the OECD selectively chose certain usage price points on the usage curve to best make their case. However, if one looks at the entire distribution of the curve, their selective conclusion looks all the more “selective” and suspect.
Fourth, the OECD based its method on one type of one carrier’s prices, which is nonsensically biased against competition and the average competitive price in a market. Given that the OECD tends to favor government-regulation-policy over competitive markets — it should not be surprising that the OECD chose selectively what it deems as the “best” prices to compare. It probably did not occur to the OECD statisticians to think that the best price for the study would be the overall average price per minute consumers effectively pay.
It will be interesting to see if the OECD statistics, as they reflect input from others, ultimately and fairly reflect economic reality in the marketplace, and not a pre-determined view that reflexively pats European countries on the back for a job well done in most always favoring regulation over market competition to achieve the best value for customers.
Uneconomics and Texting
September 15, 2009
George Ou’s good post yesterday on “Being Rational on Text Pricing” rightly takes to task the complaint that text messaging should be priced at marginal costs and ignore total costs, upgrade costs, or competition. It also prompts me to join in to address the issue.
Lets get to the quick here.
The folks arguing for text pricing to be based on marginal costs are trying to politically redefine traditional economics in the datatopian Chris Anderson vision of the “economics of abundance” — that because the marginal cost of computer processing, storage, and bandwidth are getting increasingly small — the price should be free!
- I call this political thinking that “information wants to be free” and the “economics of abundance” school of thought — simply — uneconomics.
- It ignores the real world, real economics, the reality of private property, market forces of incentives and disincentives, etc.
Does anyone think that the infrastructure that enables the instantaneous reliable delivery of roughly a billion text messages every day wherever one happens to be — costs basically nothing to pull off and thus should be free?
