At TPRC Sunday, Barbara Cherry walked through the evolution of bodies of law
in the U.S., and made some fascinating observations, including:
Net neutrality is a manifestation of moving from a Title II industry-specific
business legal regime under the Communications Act of 1934 to a Title II-based regime and greater reliance on a general business regime of antitrust and consumer protection laws, as
the FCC did in August 2005 for wireline broadband access service to the Internet and in 2002 for cable modem access service.
Simply mMoving among traditional and deregulatory legal regimes for transportation carriersdoesdid not strip common carriage status;
it merely changesd the legal overlay that enforcesd it.
FCC stripping broadband of common carriage was a radical departure:
nothing classified as common carrier has ever been declassified before.
Anti-trust doesn’t automatically cover problems frompreviously addressed in the Title II industry-specific regime
when a business is moved to the Title II general business regime.
Anti-trust needs modification to do this.
Liability is also different between regimes.
Without tariffs some legal protections for limited liability constraints are gone, and common carriers are now
potentially fully liable for damages.
The finalfiled rate doctrine should have no applicability to a detariffed world.
The above is, I think, a reasonably close paraphrase of some of her points.
I infer from this that the economists and politicians and telco and cableco
executives who say that we shouldn’t regulate because we don’t know what
will happen and anti-trust will catch problems if they occur are not
taking into account that anti-trust doesn’t automatically apply to or address problems in the new legal regime into which broadband has been thrust.
In other words, people see things in the context of what they know,
and economists don’t usually know about legal evolution.
Telco and cableco executives, on the other hand, may well have business
and political reasons for claiming there’s no need for regulation,
whether or not they know that existing anti-trust law is inadequate.doesn’t apply.
You can’t have markets without some form of property rights
of contract law.
There is also basic legal infrastructure you need
for communication infrastructure.
I see little or no understanding of these points in FCC, FTC, or Congress.
Every song and album on Amazon MP3 is available exclusively in the MP3 format without digital rights management (DRM) software. This means that Amazon MP3 customers are free to enjoy their music downloads using any hardware device, including PCs, Macs™, iPods™, Zunes™, Zens™, iPhones™, RAZRs™, and BlackBerrys™; organize their music using any music management application such as iTunes™ or Windows Media Player™; and burn songs to CDs.
Here’s another view of what the telcos and cablecos have in mind for us,
or, rather, what they want in our minds:
approved content.
This is substantially different from the Internet freedom we have today
to look at whatever we want to and to publish our own content.
Two years ago the New York Times made its best marketing estimate
of how to derive income from the web, and put many of its back stories
beyond a paywall called TimeSelect, at $49.95/year or $7.95/month.
Times change:
In addition to opening the entire site to all readers, The Times will also make available its archives from 1987 to the present without charge, as well as those from 1851 to 1922, which are in the public domain. There will be charges for some material from the period 1923 to 1986, and some will be free.
The Times said the project had met expectations, drawing 227,000 paying subscribers — out of 787,000 over all — and generating about $10 million a year in revenue.
“But our projections for growth on that paid subscriber base were low, compared to the growth of online advertising,” said Vivian L. Schiller, senior vice president and general manager of the site,
NYTimes.com.
What changed, The Times said, was that many more readers started coming to the site from search engines and links on other sites instead of coming directly to NYTimes.com. These indirect readers, unable to get access to articles behind the pay wall and less likely to pay subscription fees than the more loyal direct users, were seen as opportunities for more page views and increased advertising revenue.
“What wasn’t anticipated was the explosion in how much of our traffic would be generated by Google, by Yahoo and some others,” Ms. Schiller said.
This is why it’s a bad idea to let the telcos and cablecos determine
what we can see or do on the web.
Nobody can predict what will work best, especially for deriving revenue.
Hm, this would also mean that the duopoly’s insistence on TV as the
future of Internet revenue could be just as wrong for them
as it is for the rest of us.
Verizon Wireless seeks judicial review on the grounds that the
Report and Order exceeds the Commission’s
authority under the Communications Act of 1934,
as amended, 47 U.S.C. §§ 151, eg. seq.,
violates the United States Constitution,
violates the Administrative Procedure Act, 5 U.S.C. § 701 et. seq.,
and is arbitrary capricious, unsupported by substantial evidence
and otherwise contrary to law.
Curious how the burden of proof always seems to be on anybody
but the telcos and cablecos.
I mean, didn’t the FCC get the memo that it was only supposed
to do anything if somebody proved
market failure?
Ashley Qualls, aged 17, builds a myspace site,
Whateverlife, earns $70,000/month,
quits school, buys house, refuses $1.5 million buy out.
Her MySpace page layouts are available for the bargain price
of…nothing. They’re free for the taking. Her only significant source
of revenue so far is advertising.
Ed Shakin, a lawyer for Verizon, said network-sharing requirements are
no longer needed in certain cities now that cable companies and other
competitors have rolled out Internet and phone service. “What competitors
want are artificially low prices,” he said. “It comes down to a fight
about price, not availability.”
So Verizon is reducing the number of competitors, but as long
as there is at least one, that’s enough, they say.
Apparently Verizon thinks its competition is the Highlander:
There Can Be Only One.
Interesting post here on Scott Cleland’s Percursor Blog:
A major reason why the stakes are so high in the FTC’s review of
the Google-DoubleClick merger is how remarkably fast online
advertising is overtaking other advertising industry segments that have
been around for decades.
Interesting especially in that I don’t recall him having any
similar trepidations about the AT&T-Bellsouth merger.
He quotes eMarketer as saying that:
a recent report from equity firm Veronis Suhler Stevenson predicts that the Internet will displace television as the No. 1 ad medium by 2011.” [bold added]
Cleland did not provide a link to eMarketer or to VSS.
A little googling finds the VSS press release about its report, which
actually says:
Internet advertising is expected to become the largest ad segment in 2011,
surpassing newspapers.
It’s all very well to talk about net neutrality or Internet freedom
and how it affects 700Mhz spectrum sales or freedom of the press.
But what does all this have to do with the average Internet user?
Suppose the telcos and cablecos get everything they want.
To buy a BBQ grill on eBay, you’ll have to pay for the eBay channel.
This is above whatever you pay the seller for the grill or
eBay for your membership.
You’ll have to pay your local Internet access company
just to let you get to eBay to participate in the auction.
Oh, maybe you’ll be able to get there anyway, but your
access may be so slow that you’ll pay for the eBay channel
out of frustration.
If you want to buy a book from Amazon, you’ll have to pay for the
Amazon channel.
For search you’ll need the Yahoo channel or the ask.com channel or the
google channel.
Assuming your favorite search engine is even offered as a channel.
Many smaller services probably won’t be.
Just when you think it’s all telcos doing things dire for Internet freedom:
Comcast has warned broadband Internet customers across the country to
curb their downloading or wind up on the curb.
The company has a bandwidth limitation that, if broken, can result in
a 12-month suspension of service. The problem, according to customer
complaints, is that the telecom giant refuses to reveal how much
downloading is too much.
The company, which a few years ago advertised the service as
“unlimited” has an “acceptable use policy” which enforces the
invisible download limit.
The 23-part policy, states that it is a breach of contract to generate
“levels of traffic sufficient to impede others’ ability to send or
retrieve information.” But nowhere does it detail what levels of
traffic will impede others.
And you have to wonder how long that AUP said that while Comcast
was advertising “unlimited”.
This part is especially enlightening:
Douglas said the company shuts off people’s Internet if it affects the
performance of their neighbors because often many people will share a
connection on one data pipe.
So instead of fixing their bad topology, they penalize customers for using it.
Well, it’s a free market, right?
Comcast users who don’t like it can switch to, er, if they’re lucky
and have any choice at all, probably to whichever of Verizon or AT&T
happens to be in their area.
There couldn’t be any problems with those providers, could there?
Meanwhile, if you want to follow this Comcast controversy,
here’s the
Comcast Broadband dispute
blog that one of the cast-offs started, presumably using his new DSL connection.It’s kind of like salmon organizing against a dam upstream.
At TPRC Sunday, Barbara Cherry walked through the evolution of bodies of law
in the U.S., and made some fascinating observations, including:
