Now Net Neutrality Will Ban Ad-Based Network Business Models?

From Techdirt:

We've been dismayed at some of the really questionable or outright dishonest statements made by those paid by the telco industry on the issue of net neutrality. They keep distorting the debate -- which is disappointing, because there are reasonable arguments against net neutrality legislation. We just don't seem to hear them from the think tankers and the shills (sometimes, though not always, they're the same thing). The latest is a long piece by Haney Hance, who is certainly quite knowledgeable and experienced on the topic, but who writes up a long post explaining why enforcing net neutrality as a condition of the AT&T/BellSouth merger will make it that much more difficult for the US to have "world-class internet infrastructure." Amusingly, he points to the situations in South Korea and Japan as evidence of why the US needs better, cheaper broadband, failing to include the bit about how heavily state-supported both of these efforts were. Considering that he's warning about how it will stifle growth here to have the government involved, it's pretty bad to see him raise up those examples as reasons why we need less government regulation. He also says that AT&T/BellSouth wouldn't block web sites or degrade service, despite the fact that they've said they wanted to in the past. Hance, instead, says it's no problem since AT&T's CEO has promised he'd never do that (going against his own earlier statements). Of course, we've seen the telcos go back on their promises before -- so forgive us for being skeptical.

However, the meat of his piece is to suggest that if network neutrality rules were put in place, it would mean that telcos would be unable to experiment with business models that involved using advertising as a subsidy. Of course, he leaves out the part where he explains why this is. He just states it as true, when there's simply no evidence to support that being the case. A non-discrimination clause (while problematic in other ways), would not limit a telco from offering broadband service that's supported by advertising -- and there were even attempts (which failed miserably) to offer such services in the past. He even makes it sound like Google and Yahoo are somehow taking money out of the telcos hands by being able to advertise without having to give up a piece of it to the telcos ("content providers like Google, Yahoo and eBay get to keep every dollar spent on online advertising.") That's because those providers already pay the telcos for their bandwidth and provide the actual pages on which the advertisers advertise. What they do with it, is none of the telcos concern -- which is the point the network neutrality folks keep trying to get across. While I'm still worried about any new legislation that gives the government more power to regulate the internet, it's disturbing to see the continued batch of bad arguments coming out in favor of the telco position. It doesn't help their cause at all. It just makes it look like they don't have a real argument.

Why Not Have The Government Tax Google To Pay For Next Generation Networks?

From Techdirt:

For all of the bad arguments we see against network neutrality legislation, at the very least they come from a basic (if skewed) free market rationale. They very much focus on the idea of keeping the government out of the process (which is somewhat amusing when you consider how many favors, tax breaks, government-granted rights of ways and subsidies were used to get the telcos to where they are today). While it was AT&T's Ed Whitacre who kicked off the latest round of net neutrality debates a year ago by saying that companies like Google should pay AT&T for delivering their content, at least he was talking about a private deal between two companies. More recently, the telcos have backed away from the idea that Google owes them money for a free ride, perhaps because it's idiotically wrong and provably false. That's resulted in some net neutrality critics saying that the telcos would never, ever block a service like Google (despite their own earlier statements).

Apparently, however, someone forgot to tell all of that to Canadian cable company Videotron, who's chief stirred up the pot by not only suggesting that all of these internet companies are getting a free ride on his network, but tossing out all the "free market" "hands off" crap to come right out and say he thinks the government should put a "transmission tariff" on various internet service to help fund the ability for his company to build a new network. Somehow, I think Robert Depatie may have lost a bunch of support from free market think tankers on that suggestion. Of course, there is no fundamental reason for this, other than greed from a company who wants more money from the government because it's unable or simply too lazy to build up its own business. David Canton responds to this suggestion the same way some of us suggested Google should respond to the earlier suggestions that they were getting a free ride: they should ask the telcos to pay them. After all, it's services like Google and Apple and Amazon that make the broadband lines the telcos and cable companies provide valuable. The problem is that these telcos and cable companies think they have the power position here, when they don't. Or, perhaps, in this case, Videotron realizes it doesn't have the power position, which is why it's asking for the government to step in and force Google to pay up.

Network Neutrality Debate: It's All Relative

From Techdirt:

It seems like the whole "network neutrality" debate is back for another round... and just like last time we're seeing a lot of arguments that seem to be talking past one another, while filling in the cracks with dishonest points, rather than trying to figure out the core of why there's disagreement and seeing if there's some sort of middle ground. While I've been accused of supporting both the telcos and the big internet companies' side of this debate, the truth is I support neither, and believe that there really are more than two sides. In fact, I think it's really just a case where there's not nearly enough competition in the marketplace. If there were, than no broadband provider would even dare to suggest a non-neutral network, or it would lose a lot of business pretty quickly. At the same time, I'm skeptical that any legislative approach to enforcing "neutrality" will work -- and in the long run will most likely create a series of loopholes or a setup that will allow the dominant providers a way to game the system to their advantage.

Larry Lessig recently wrote an op ed piece for the Financial Times talking about the importance in broadband competition and how it's been weakened in the US. Scott Cleland, who has been one of the loudest "think tankers" arguing against network neutrality, responded by challenging a bunch of facts in Lessig's piece. Lessig then responded himself, pointing out that the Cleland's attempt at refuting Lessig's points did no such thing. You can read the whole debate yourself to see where you come out on it, but there are a few points that deserve to be highlighted. First, Cleland pulls out stats about broadband competition saying that price has been decreasing, even though that's not really true. It's mostly stayed steady, once you take out special promotional pricing and the cost of various "bundles" you're forced to sign up for to get the cheaper pricing. Lessig also points out that on a dollars per bandwidth measurement, prices have gone up. In other words, it all depends on how you set your scale.

The same is true of Cleland's argument about how much more broadband we have in the US than we had a few years ago. He trots out the discredited FCC numbers, while Lessig again points out that his scale is wrong. He's doing a then and now comparison within the US, rather than comparing US broadband change to other nations around the world, where we've fallen increasingly behind. As I've said in the past, it may not be the worst thing to fall behind somewhat, if others are making big bets that will later turn out to be mistakes -- but it is still interesting to see a second situation where the debate hinges on both sides using a different scale. Finally, pulls out the completely bogus argument that we thought had died that breaking net neutrality is nothing new because it's exactly what companies like Akamai have always done. The trick here is more subtle, but no less wrong. Akamai doesn't break net neutrality because it provides a premium access path for everyone -- not just customers of a specific ISP. It continues the end-to-end approach of the internet by allowing a company to create better speeds for anyone who wants their content. The telcos aren't trying to do that. They're trying to create special pipes that will force content and service providers just to reach their customers. It's very much a case of what Lessig later points to in the form of a post from Brian Wills saying that the net neutrality debate is similar to if electricity companies tried to charge a premium for what you used the electricity for -- rather than just the amount of electricity. Now, you can argue that's perfectly reasonable, but it's not the way the debate has mostly been portrayed up until now. Supporters of the telcos have argued that net neutrality would ban them from charging more for general bandwidth, which isn't the case at all.