Imagine that when we started Apple we set things up so that we could
charge purchasers of our computers by the number of bits they use. The
personal computer revolution would have been delayed a decade or more. If
I had to pay for each bit I used on my 6502 microprocessor, I would not
have been able to build my own computers anyway.
He also details examples of how difficult it was to start a new service
the way the telephone system used to be,
how radio used to all be freely receivable,
and how cable TV is mis-regulated.
He summarizes his case:
I frequently speak to different types of audiences all over the
country. When I’m asked my feeling on Net Neutrality I tell the open
truth. When I was first asked to “sign on” with some good people
interested in Net Neutrality my initial thought was that the economic
system works better with tiered pricing for various customers. On the
other hand, I’m a founder of the EFF and I care a lot about individuals
and their own importance. Finally, the thought hit me that every time
and in every way that the telecommunications careers have had power or
control, we the people wind up getting screwed. Every audience that I
speak this statement and phrase to bursts into applause.
Then he asks for all that not to happen to the Internet:
We have very few government agencies that the populace views as looking
out for them, the people. The FCC is one of these agencies that is still
wearing a white hat. Not only is current action on Net Neutrality one
of the most important times ever for the FCC, it’s probably the most
momentous and watched action of any government agency in memorable times
in terms of setting our perception of whether the government represents
the wealthy powers or the average citizen, of whether the government is
good or is bad. This decision is important far beyond the domain of the
This column is dedicated to the top managers of American business whose policies and practices helped ensure Barack Obama’s victory. The mandate for change that sounded across this country is not limited to our new President and Congress. That bell also tolls for you. Obama’s triumph was ignited in part by your failure to understand and respect your own consumers, customers, employees, and end users. The despair that fueled America’s yearning for change and hope grew to maturity in your garden.
Millions of Americans heard President-elect Obama painfully recall his sense of frustration, powerlessness, and outrage when his mother’s health insurer refused to cover her cancer treatments. Worse still, every one of them knew exactly how he felt. That long-simmering indignation is by now the defining experience of every consumer of health care, mortgages, insurance, travel, and financial services—the list goes on.
Here’s a take on why telcos so adamantly oppose net neutrality:
The eager and almost rabid application of Porter’s “Five Forces” (Supplier
Power, Customer Power, Threat of New Entrants, Threat of Substitute
Products, Industry Rivalry) to technology products and services has
bred an entire generation of MBAs in marketing positions dedicated to
developing and maintaining closed systems and closed hardware platforms.
This is particularly egregious in the case of business models that are
effectively based on distribution channels. In conventional analysis
there is nothing wrong with making your living on distribution channels.
Remember, that in 1979, when Porter developed the Five Forces framework,
distribution channels were highly expensive to create and maintain
and, owing to these costs, constructing them effectively presented
a significant barrier to entry. Your product didn’t even have to be
particularly good, because the threat of substitutes was reduced via
the difficulty and expense of the competition actually getting those
substitutes (however good they might be) to your customers. Suppliers,
if they wanted access to your customer base as a proxy to sell their raw
materials, had to go through you. New entrants had to build an entirely
new distribution channel. Customers were stuck. You owned the market.
But you had to guard this distribution channel carefully. And you
had to make sure you hadn’t forgotten something simple and critical.
That’s not part of a conventional Porter analysis. But why would it be?
Conventional distribution channels are quite physical, antique and boring.