Category Archives: Innovation

A Cisco Way

Cisco has a policy blog, in which they back no regulation before market failure:

In other words, there is no reason to rush to impose burdensome Net Neutrality regulations in the broadband market. If there is one thing that we have learned from 70+ years of communications regulation, it is that regulation has significant costs and unintended consequences. The FTC clearly recognizes that government should react to actual problems, not hypothetical ones.

It’s funny how the Internet grew up with net neutrality, but now it’s “burdensome.” Maybe innovation and competition are burdensome to incumbents.

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Broadband Produces Employment

Many have assumed that broadband is good for the economy; now here’s a study with rivets:

More specifically, for every one percentage point increase in broadband penetration in a state, employment is projected to increase by 0.2 to 0.3 percent per year.
— The Effects of Broadband Deployment on Output and Employment: A Cross-sectional Analysis of U.S. Data, By Robert Crandall, William Lehr and Robert Litan, Brookings Institution, 2007

Of course, this is like saying every state in medieval Germany that had a printing press produced employment in the printing industry. There are economic and social effects far beyond mere employment. What should be done?

The paper has a few recommendations:

The surest route to lower prices is provided by increasing competition in the delivery of broadband services.

Continue reading →

FTC: What, Me Worry?

The U.S. Federal Trade Commission (FTC) says there’s no need for net neutrality:

FTC Chairwoman Deborah Platt Majoras said that without evidence of “market failure or demonstrated consumer harm, policy makers should be particularly hesitant to enact new regulation in this area.”

So in a “market” where the average customer has at most two choices, we’re supposed to wait for a market failure? Continue reading →

Framing Net Neutrality

Here’s an interesting exercise in framing net neutrality:

On the one side are traditional media – phone and cable companies, the carriers – in rare agreement. They do not want to be regulated, and they want to preserve the profitability potential that protects their network upgrades. They are therefore joined by some hardware tech firms. On the other side is what might be called the internet-industrial complex – consisting of idealistic net community folks, small start-ups, large Silicon Valley corporations pretending to be both – and Hollywood, in another strange bed fellowship.
The US Congress is in the middle; by the latest count six bills are pending, and while none is likely to be passed for now, the process itself has been a boon.
— A third way for net neutrality, By Eli Noam, Financial Times, 29 August 2006

Note “internet-industrial complex”, in analogy to Eisenhower’s phrase, “military-industrial complex”. Yet the cablecos and telcos are said to be “in rare agreement” when actually they have long been acting on the same side on this issue; after all, it’s in both their (short-term) interests to keep the number of players down. With no competition, there’s no real market, and thus no real competition (which long-term means they won’t be competitive with their international competitors, which are already offering speeds ten times faster for similar prices). Continue reading →

Reemphasizing Innovation

Pointing out the tiny little problem with globalization, namely that with fast global data networks many jobs from doctors and lawyers to clerks become offshoreable, an economist tries to look ahead:

What else is to be done? Trade protection won’t work. You can’t block electrons from crossing national borders. Because U.S. labor cannot compete on price, we must reemphasize the things that have kept us on top of the economic food chain for so long: technology, innovation, entrepreneurship, adaptability and the like. That means more science and engineering, more spending on R&D, keeping our capital markets big and vibrant, and not letting ourselves get locked into “sunset” industries.
— Alan Blinder: Free Trade’s Great, but Offshoring Rattles Me, Grasping Reality with Both Hands: Brad DeLong’s Semi-Daily Journal, 5 May 2007 quoting Free Trade’s Great, but Offshoring Rattles Me, By Alan S. Blinder Washington Post, Sunday, May 6, 2007; B04

If this is the case, then it would seem that promoting innovation by promoting a fast, open, and participatory Internet would be important for the U.S., and also important to the rest of the rest of the world that wants the U.S. to remain a major market.

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Speed Is Trivial

Sometimes Bob Frankston makes me shake my head in wonder:

Speed is trivial — the dial up modem completely trounced the entire Interactive TV industry thanks to the web which gave people a reason to find their own solutions without waiting for a service provider to deign to provision a path. As long as you don’t over-defined the solution you’ll get speed — it’s hard not to.
— Re: We’re Stuck In The Slow Lane Of The Information Trollway — it’s all about the billing relationship, Bob Frankston, Interesting People, Sat, 12 May 2007 20:13:50 -0400

Yes, back in the 1990s, video on demand and interactive TV were the big plans of the cablecos and telcos. They tried it. Users didn’t buy it. Instead, participants bought modems and the web boomed. Continue reading →

Exogenous Technological Change

Here’s a good backgrounder video on where the Internet came from and where it may be going: Humanity Lobotomy. See especially the part by Larry Lessig about how printing presses in the early days cost about $10,000 in 2007 dollars, and lots of people had one and published books and pamphlets.

What did the telephone companies have to do with inventing the Internet?
Nothing.
The browser?
Nothing.
The World Wide Web?
Nothing.
What have they had to do with the Internet from the beginning of time?
Nothing.
–Bob Kahn

What did they invent? Continue reading →

Peerflow

Open participation through a fast Internet