The Only Republican in San Francisco

New Washington Post editorial on net neutrality

Professors David Farber and Michael Katz have a new editorial at the Washington Post on net neutrality. They argue many of the things I've been arguing all along, and they lay it out quite clearly.

The Internet needs a makeover. Unfortunately, congressional initiatives aimed at preserving the best of the old Internet threaten to stifle the emergence of the new one. [...]

Network neutrality is supposed to promote continuing Internet innovation by restricting the ability of network owners to give certain traffic priority based on the content or application being carried or on the sender's willingness to pay. The problem is that these restrictions would prohibit practices that could increase the value of the Internet for customers. [...]

Blocking premium pricing in the name of neutrality might have the unintended effect of blocking the premium services from which customers would benefit. No one would propose that the U.S. Postal Service be prohibited from offering Express Mail because a "fast lane" mail service is "undemocratic." Yet some current proposals would do exactly this for Internet services.

Read the whole thing.

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The ever-sensible Cynthia Brumfield has more.

San Francisco Wi-Fi politics

Cynthia over at IP Democracy has a good summary of the current state of SF’s municipal Wi-Fi project. The current deal proposes that Earthlink and Google will have exclusive rights to build and support a new wireless network.

On the uspide, I am glad that the city is not trying to build its own network, which would be an underperforming, wasteful boondoggle. Mayor Newsom agrees:

But Newsom rejected alternatives, saying San Francisco has neither the expertise nor the money to spare.

"I'm not going to take $10 million from poor people to pay for something that a private company has offered to pay for," he added, suggesting money for a system owned or part-owned by city government would take money from social programs.

However, granting exclusive rights to Earthlink/Google raises problems of its own, as Cynthia points out:

Aside from limiting competition due to EarthLink’s control of the unlicensed radio bands, not to mention Google’s role as sole ISP, the deal won’t even help the city’s low-income residents, who might have to shell out $80 to $200 for [home equipment] plus pay $21.95/month for relatively low-speed broadband service

I’ve said before that it’s not even clear there is a verifiable demand for this, which is to say customers who will pay for the network in such a way that supports itself. I also think it’s far from clear that Wi-Fi is the best technological choice (with WiMax on the horizon) or that blanket coverage of the city is a good allocation of resources.

For example, why would we blanket every residential neighborhood with Wi-Fi? I can buy DSL or cable for Internet access, and I doubt that a Wi-Fi antenna sitting down the block will offer anything that’s as reliable or fast. Plus, I can buy a 3G wireless plan for Verizon or Sprint if I need the mobility. So exactly what gap is being filled by muni Wi-Fi, at the end of the day?

The only argument I can see is for true public spaces, which is to say, the city might consider Wi-Fi as part of its parks and libraries budgets. Those are places that residents actually expect municipal services. And if coffee shops and shopping malls want it, those businesses can do it themsleves. Many already do, of course.

Seems to me the city should simply be non-discriminatory and let any company that wants to come in and build a network to do so, with the same rules applying to all comers. It would obviate the politics and offer a true test of the viability of municipal Wi-Fi.

Google vs. neutrality, part 3

[nerd stuff, bear with me]

Richard Bennett points out that Google has applied for a patent on QoS, which for non-techies means a way of making sure certain Internet traffic has priority over other traffic. Seems to be the precise opposite of net neutrality, no?

The present invention provides efficient and effective quality of service for information that is time sensitive (e.g., real time data) [...]

In one embodiment of the present invention time sensitive information is cut through routed on a virtual channel and pre-empts non time sensitive information.

Interesting: information that "pre-empts" and "cuts through". I wonder whose traffic they intend to give this sort of priority treatment?

Google has no interest in neutrality of any sort, be it on the content level or the physical network. By cynically backing net neutrality regulation, they hope to subdue potential competitors through force of government. At the same time, they work to build advantages that are theirs alone.

If you believe that net neutrality is in some way a noble or progressive concept, take some time to understand the goals of its biggest proponents.

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As much as I love to bash Google's hypocrisy, I support their right to develop any and all technology that gives them advantage. They understand the technical advantages of being able to prioritize traffic. The best way to tune this priority is to let folks pay for it to the extent they believe it important.

You might recognize this as "the market". In the real world, the market ain't neutral. It makes real decisions, all day, every day, to express the pluralistic will(s) of the people. The result is wealth and freedom for more people than any other system, plus an extraordinary ability to adapt to changes.

I'd like a similar wealth and dynamism on our networks. In the same way that socialism helps to ensure a roughly equal level of poverty across a society, network neutrality promises a similar stasis for the Internet. I think we can do better.

Google gets less neutral

You may have seen my previous post about how Google is not interested in any concept of content neutrality that applies to itself. As if to further prove the point, Google today stopped providing links to competitive mapping sites.

Now, for me, that's fine. Totally within their rights. But I wonder how net neutrality advocates -- with their love of line-sharing -- feel about this. As a dominant provider of search, shouldn't Google open up their network to their competitors?

The Fairness Doctrine and net neutrality, natural partners

I've said many times that net neutrality regulations are tantamount to the Fairness Doctrine, an old law wherein the government determined what amounts to "fair speech". Dennis Kucinich, with the help of two FCC commissioners, has now made this explicit:

In addition to media ownership, the committee is expected to focus its attention on issues such as net neutrality and major telecommunications mergers. Also in consideration is the "Fairness Doctrine," which required broadcasters to present controversial topics in a fair and honest manner.

As a reminder, net neutrality legislation aims to regulate how Internet traffic flows over private networks. That traffic is, of course, your speech.

Similarly, net neutrality rhetoric often mentions "fairness", but the real goal is advantage for certain (for-profit) organizations at the expense of other organizations, their constituents, and their customers. The government picks winners, in other words. The ultimate loser is the public, in the form of diminished freedoms and a less dynamic media marketplace.

Here is a reminder of the bad old days under the Fairness Doctrine:

This doctrine grew out of concern that because of the large number of applications for radio station being submitted and the limited number of frequencies available, broadcasters should make sure they did not use their stations simply as advocates with a singular perspective. [...]

The fairness doctrine ran parallel to Section 315 of the Communications Act of 1937 which required stations to offer "equal opportunity" to all legally qualified political candidates for any office if they had allowed any person running in that office to use the station. The attempt was to balance--to force an even handedness. Section 315 exempted news programs, interviews and documentaries. But the doctrine would include such efforts. Another major difference should be noted here: Section 315 was federal law, passed by Congress. The fairness doctrine was simply FCC policy. [emphases mine]

In other words, the Fairness Doctrine grew out of a perception of scarcity of media outlets, based on limited radio frequencies. To say that this is an antiquated concept in a time of several-hundred-channel cable TV, satellite TV, satellite radio, and of course our little Internet, is to state the obvious. And yet, such regressive concepts are held in high esteem by folks like Kucinich.

Further, the Fairness Doctrine was enacted by the unelected FCC, above and beyond laws passed by Congress. If it were simply one elected official advocating this idea, we might not be so worried. But joining him are two current FCC commissioners who share his enthusiasm:

FCC Commissioner Michael Copps was also on hand at the conference and took broadcasters to task for their current content, speaking of "too little news, too much baloney passed off as news. Too little quality entertainment, too many people eating bugs on reality TV. Too little local and regional music, too much brain-numbing national play-lists." Commissioner Jonathan Adelstein also spoke at the event.

You read that right. Mr. Copps believes he is in a position to determine what there is "too much" and "too little" of on TV. Perhaps you can sense his hand on your remote.

Let's be clear: net neutrality and the Fairness Doctrine are two sides of the same coin, which is government regulation of speech. If anyone can explain to me how this comports with the First Amendment, I am all ears.

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Not surprisingly, the Daily Kos loves the idea. After all, free speech only makes sense so long as we all agree, right?

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Hello Slashdotters, welcome. If you have the patience, here are some extended rants on the subject, just keep scrolling.

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Captain Ed has more. What is interesting is that most media leans left-of-center. If the Fairness Doctrine were enforced, might we see a little more balance toward the right? But then again, with gov't making the rules, "fair" is fair game.

An argument for search engine neutrality

Over at Slashdot, they point out a story about how a particular web site dropped out of Google's search index, and therefore into oblivion:

We had completely disappeared from Google's main index! If you run a website, then you know how serious a problem this is. On any given day over 10,000 visitors arrive at Javalobby as a result of Google searches, and suddenly they stopped coming! ... Suddenly we no longer existed in the eyes of Google.

Now, this sounds to me exactly the phenomenon that net neutrality advocates are fearing: a money-hungry company effectively controlling who does and doesn't see your site. As Dave Skrenta explains:

The net isn't a directed graph. It's not a tree. It's a single point labeled G connected to 10 billion destination pages.

If the Internet were a monolithic product, say the work of some alternate-future AT&T that hadn't been broken up, then you'd turn it on and it would have a start page. From there you'd be able to reach all of the destination services, however many there were.

Well, that's how the net has organized itself after all.

Google has much more power over what you see and don't see than any network provider. In the telecoms world, no company has more than 22% of the consumer market, while Google's share is somewhere between 50% and 70%, depending on whom you ask.

So if our goal is to preserve an Internet which allows equal access to any and all sites, which company really holds the power?

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To be clear, I think Google should have 100% freedom (as they do now) to determine how sites appear on Google, and I think AT&T (and Verizon and Comcast and Sprint and Global Crossing) should have the same freedom to determine how data flows over their pipes. The consumer will make the call and direct their business accordingly.

The idea of telling Google how to run their search engine in the interest of "neutrality" is absurd, no? And yet neutrality advocates are making precisely that argument against companies that have much less influence than Google.

It is not a coincidence that Google is a big supporter of network neutrality regulation. It is in their financial interest to do so. They control a disproportionate share of the Internet user's experience, and they want to keep it that way.

I think most people would agree that regulating Google would not be in consumers' interests. If we want to continue development of a free and rapidly evolving Internet -- from the physical network to information brokers like Google -- let's not tell the companies that comprise it how to do business.

(h/t Instapundit)

Bill Gates on net neutrality

Here is an interesting video interview with Bill Gates, by Robert Scoble over at PodTech. He mentions net neutrality in response to a question from Ryan @ Engadget.

A quick transcription, emphasis mine:

Microsoft wants people to build Internet infrastructure that has the ability to feed high-definition video to every screen in your house, so we want the incentive to be there for people to build out new networks [...]

We had people who are just the content people saying things that would have eliminated incentives to build better networks.

[Microsoft] is kind of a fair broker, because we need both [...]

There are regulatory models in Europe where the high-capacity networks just won't be built because they [enforce a pricing model] that just means you’re just not gonna do high-definition interactive network. [...]

In its purest form, you eliminate the incentive to build better networks, so you have to be careful about that.

Most people are either a network company who doesn't want any restriction, or a content company that doesn't understand the disincentive to building out the networks. There were tons of things proposed that would have made the U.S. just like Europe.

Of course, I selectively chose the bits that best support my position, feel free to watch for yourself below.

Gates treats both sides fairly, and emphasizes that it’s more complex than most people understand. He makes clear that building the network must be first and foremost, that serious investment must be made, and that regulation poses a big threat to the next generation of Internet.

What’s important is that Microsoft is on both sides of this debate, since they are in content and also in infrastructure.

Here’s the point: the current Internet ain’t all that and a bag of chips. It doesn’t do high-definition, which is what the consumer will quickly come to expect. Net neutrality proposes to freeze the status quo in place, in the interest of “fairness”. In fact it would give us a uniform level of poverty, which is unfair to everyone. Think next, folks, not just now.

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The video is here, the neutrality stuff starts at 38:20. After hitting play, you may have to wait for the video to fully load, and then you can forward to that point.

P.S. I would have cued up to the interesting stuff automatically, but PodTech does not yet have this feature. Bloggingheads.tv does! They call it dingalink and it allows linking directly to a quote within the video. Hey Scoble, that would be a nice differentiator...

Lessig opening his mind on net neutrality?

Lawrence Lessig has a new article over at Wired where he considers the possibility that he was wrong about Microsoft, and might be wrong about net neutrality:

I think about this mistake whenever I think about the current Microsoft-like network-neutrality debate – whether network owners can pick the stuff that flows across “their” network. In this debate, too, I am a reluctant regulator. And again, I don’t see how it’s possible to steer broadband providers away from a business model that – like Microsoft’s – may benefit them but could stifle innovation. Every dominant commercial competitor has the same incentive: to build a business that extracts all potential value from the pipes that company owns.

Every competitor (dominant or not) does everything it can to extract value from its product. This drives efficiency and productivity, which are the two main predictors of prosperity in any society. These are the reason that a place like Stanford exists in the first place.

(And by “extract value”, I mean “provide something that people will pay for”. All the power resides with consumer so long as the market remains free.)

Importantly, Lessig recognizes that the anti-trust lawsuit did nothing to change Microsoft’s position in the market. Instead, Linux, developed by volunteers, has provided competition which in turn has made Microsoft less dominant and more responsive. I think that’s a fine thing and a market response, since consenting citizens have dedicated their resources voluntarily.¹

Lessig wonders if something similar can happen for broadband. Unfortunately, he looks to municipal governments to provide “competition” to the commercial network providers:

So, are we reluctant regulators wrong again? [...] Can last-mile broadband be developed in a way that doesn’t rely on the incentives that drive current providers toward innovation-stifling business models?

Yes. [...]

The core of this resistance comes from municipalities. Local governments are building neutral infrastructures that allow anyone, from ISPs to community networks, to use and extend blisteringly fast broadband networks. [...]

Those who oppose network-neutrality regulation should also oppose this regulation of last-mile broadband’s most important competitor.

Categorically incorrect. There is a vast difference between a government building a network, and a group of volunteers building a product, and it is this: there is nothing voluntary or grassroots about government.

As I have mentioned before, government will fund projects regardless of their success or customer demand. And the funding comes from taxpayers, who did not in any way volunteer their resources.

Mr. Lessig should know that government, by definition, is the largest and most unaccountable monopoly. If citizens want to dedicate their own resources to an “open source” network, more power to them. But please do not mistake a coercive bureaucracy for a movement.

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There is a very good discussion of this over at Reason entitled Stop Me Before I Regulate Again!. Be sure to scroll down for the comments.

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¹ Let’s be clear: Linux is a factor primarily due to the efforts of for-profit companies like IBM, RedHat and Novell. Without them, Linux is a hobbyists’ project and nothing more.

Net neutrality locks in the dinosaurs; the upside of threats

Cynthia Brumfield over at IP Democracy has a sensible take on the recent developments on net neutrality:

As much as I think broadband network owners will give in to their own worst instincts absent some kind of non-discrimination rules, trying to squeeze as much money as they can out of third-party service providers, all this talk of legislation gives me the willies. For one thing, the Internet ecosystem is pretty fragile because it is very complex, despite all the robust businesses being built on the web.

Throw into the mix a new set of variables — rigid ones, mandated by law no less — and all kinds of weird economic distortions could occur. We just don’t know what will happen and I’d hate to see the Internet screwed up by new laws just as much as I’d hate to see the Internet screwed up by misguided cable and phone companies. [emphases mine]

She and I agree that new laws have a very good chance of creating perverse incentives (“economic distortions”) in an important and dynamic market. Same willies, in other words.

In a market with high regulatory burdens, two things happen. First, a company’s incentives are no longer exclusively focused on the consumer. Instead, a good portion of the company’s resources go to staying in the good graces of government.

The inevitable result is that industry and government grow ever closer, and that industry begins to demand concessions from government to make up for these limitations.

Witness PG&E, the electric and gas utility here in Cali. They cannot change prices or services without permission from the Public Utilities Commission. In exchange for being under the thumb of the commission, PG&E has been guaranteed survival (via taxes in the general fund) regardless of what the market demands or how well they perform.

There is little reward for increasing capacity, efficiency, or innovation of any sort. Why would they build? New investment creates no return and stagnation carries little downside.

Result: a public utility monopoly, unresponsive, innovation-free and heavily subsidized. Sadly, neutrality advocates are making the same arguments that led to our current situation in public utilities. The Internet deserves better.

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There is a second, more important way that a regulated market limits competition. To the extent that network providers are bound by law to offer only neutral (dumb) networks, it becomes a commodity business.

There is very little way for a network provider to differentiate its offering, since Verizon’s neutral network will look a lot like AT&T’s neutral network. It simply becomes a competition of scale and price. A competition of scale favors those that have it — namely, the large incumbents.

If nimble upstarts can’t compete on features (by law) and they can’t compete on scale (by size), why would they enter the market? Neutrality legislation is an excellent mechanism for freezing the incumbents in place.

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The place where Cynthia and I might differ is that I am not bothered by the cable and phone co’s “worst instincts”, if those instincts are to extract as much money as they can from their third-party customers.

The market has a degree of competition, but if the goal is more competition, the best way to attract newcomers is to offer the promise of profit.

If prices (or customer dissatisfaction) rise as a result of AT&T and others using their market position, it provides an opportunity for newcomers to invest. If we try to regulate their products or prices — two sides of the same coin, btw — this incentive disappears, and again we lock in the dinosaurs.

The best way to guarantee consumer benefit is to ensure that the incumbents have competition from clever newcomers — imagine if WalMart got into the WiMax business, for example.

To the extent that we outlaw innovation at the network level, we promote the status quo.

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Anyway, Cynthia offers a wry solution: keep the threat of legislation in place long enough to achieve our short term goals without doing permanent damage.

I’m with Princeton’s Ed Felten, who thinks the best option is to do nothing while at the same time threaten to do something. Keep broadband providers on the straight and narrow with the prospect of new regulations if they get out of hand.

Clever, and perhaps even desirable. It’s not unlike the “voluntary” rating system that the movie industry put in place to stave off congressional censorship.

Overall, it still sounds like governmental bullying to me, and the network guys will always test their limits. But threats are much less damaging than actual legislation, so perhaps there is a happy medium to be found.

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Update: Richard Bennett surveys the field.

AT&T's net neutrality concession

Interesting bit that AT&T has offered a net neutrality concession in its bid to merge with SBC. It’s causing equal parts triumph and consternation among neutrality advocates. I think the consternation part is most accurate, since AT&T seems to have gained its merger without giving up much of anything.

Susan Crawford has what I found to be the most insightful analysis on this, for a number of reasons. She parses the language to point out a couple of important things. The first is that the neutrality provisions do not apply to AT&T’s new offerings, only to their existing DSL offering:

"Wireline broadband Internet access service" means traditional copper-wire digital subscriber line access provided by phone companies like AT&T.  It's not very fast, but it's much faster than dial-up, and AT&T and Verizon sell it to a lot of people.

Importantly, neutrality does not apply to their new “U-verse” service, which offers Internet-based television to compete with cable. So in that regard, I am OK with it, since most of my concern about neutrality legislation is that it would put a straightjacket around new services.

And the “neutrality” is limited to the pipe from the consumer’s house to the first router that it hits at AT&T. So follow the wire from your home to where it first joins the network. That part is neutral. It’s also the least interesting part of the network, and not the place to put intelligence, in any case.

For these reasons the neutrality provisions are, to my mind, toothless. And in that regard I agree with neutrality advocates, though for me it’s a positive and for them it's a negative.

Susan also points out something I have been saying all along:

This means that naked, neutral, non-prioritized internet access (for AT&T customers, anyway) stays at 2001 speeds.  AT&T has no incentive to upgrade its existing DSL facilities -- it wants to move everyone to this new U-verse.

Exactly right. AT&T (and any other network provider) has very little incentive to invest in a regulated, neutral network. By adding a neutrality promise to their existing DSL, they have removed any reason to build out that network further.

(Our copper phone infrastructure has remained in stasis for 100 years for this reason.)

So imagine if neutrality proponents get their way and enforce network neutrality via a governmental diktat. This disincentive would then apply to our entire network infrastructure. I am glad that Susan has pointed this out, though I suspect this isn’t the argument she wished to make.

Overall, AT&T made a concession out of political expedience, and I think it won’t mean much. The neutrality provisions are sunsetted after two years, and they don’t apply to the interesting parts of the network. I think AT&T won this round.

And, to be clear, I don’t much care if AT&T or any of the other players lives or dies. I am not rooting for anyone except the consumer, who is best served by an unregulated market.

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Richard Bennett has more.