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Excerpt

The day after the FCC’s net neutrality vote, Washington was downright frigid. I’d spoken at three events about the ruling, mentioning at each that the order could be overturned in court. I was tired and ready to go home.

I could see my Uber at the corner when I felt a hand on my arm. The woman’s face was anxious. “I heard your talk,” she said.“If net neutrality is overturned, will I still be able to Skype with my son in Turkey?”

The question reveals the problem with the supposed four million comments submitted in support of net neutrality. *Almost no one really gets it. *Fewer still understand Title II, the regulatory tool the FCC just invoked to impose its conception of net neutrality on the Internet.

Some internet engineers and innovators do get it. Mark Cuban rightly calls the uncertainty created by Title II a “Whac-a-Mole environment,” driven by political whims. And telecom lawyers? They love it: whatever happens, the inevitable litigation will mean a decade’s worth of job security.

As I’ve said in technically detailed comments, academic coalition letters, papers, and even here at Wired, while “”net neutrality”” sounds like a good idea, it isn’t. And reclassifying the internet under Title II, an antiquated set of laws repurposed in the 1930s for Ma Bell, is the worst way to regulate dynamic digital services.

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Republican FCC Commissioners Ajit Pai and Mike O’Rielly spoke about their opposition to the Federal Communications Commission (FCC) rules on net neutrality. The FCC voted 3-2 the previous day to regulate the Internet as a public utility.

Attorneys talked about the Federal Communications Commission (FCC) 3-2 vote in favor of rule changes that reclassify high-speed broadband as a public utility, The change was intended to prevent Internet service providers from giving some customers preferential treatment or establishing “fast lanes.”

It’s easy to look at the net neutrality debate and assume that everyone is acting in their self-interest and against consumer welfare. Thus, many on the left denounce all opposition to Title II as essentially “Comcast-funded,” aimed at undermining the Open Internet to further nefarious, hidden agendas. No matter how often opponents make the economic argument that Title II would reduce incentives to invest in the network, many will not listen because they have convinced themselves that it is simply special-interest pleading.

But whatever you think of ISPs’ incentives to oppose Title II, the incentive for the tech companies (like Cisco, Qualcomm, Nokia and IBM) that design and build key elements of network infrastructure and the devices that connect to it (i.e., essential input providers) is to build out networks and increase adoption (i.e., to expand output). These companies’ fundamental incentive with respect to regulation of the Internet is the adoption of rules that favor investment. They operate in highly competitive markets, they don’t offer competing content and they don’t stand as alleged “gatekeepers” seeking monopoly returns from, or control over, what crosses over the Interwebs.

Thus, it is no small thing that 60 tech companies — including some of the world’s largest, based both in the US and abroad — that are heavily invested in the buildout of networks and devices, as well as more than 100 manufacturing firms that are increasingly building the products and devices that make up the “Internet of Things,” have written letters strongly opposing the reclassification of broadband under Title II.

There is probably no more objective evidence that Title II reclassification will harm broadband deployment than the opposition of these informed market participants.

These companies have the most to lose from reduced buildout, and no reasonable nefarious plots can be constructed to impugn their opposition to reclassification as consumer-harming self-interest in disguise. Their self-interest is on their sleeves: More broadband deployment and adoption — which is exactly what the Open Internet proceedings are supposed to accomplish.

If the FCC chooses the reclassification route, it will most assuredly end up in litigation. And when it does, the opposition of these companies to Title II should be Exhibit A in the effort to debunk the FCC’s purported basis for its rules: the “virtuous circle” theory that says that strong net neutrality rules are necessary to drive broadband investment and deployment.

Access to all the wonderful content the Internet has brought us is not possible without the billions of dollars that have been invested in building the networks and devices themselves. Let’s not kill the goose that lays the golden eggs.

Filed under: antitrust, law and economics, markets, monopolization, net neutrality, technology, telecommunications, vertical restraints, wireless Tagged: antitrust, net neutrality, open internet, tech companies, Title II

Summary

“We are professors and scholars of law, business, economics, and public policy with expertise in communications, competition, innovation, industrial organization and related fields. We write to express our concerns regarding the Federal Communications Commission’s (“FCC”) apparent plans to prohibit paid prioritization and to reclassify broadband under Title II of the Communications Act. In its competition advocacy, the Federal Trade Commission (“FTC”) promotes consumer welfare by analyzing policies and offering alternatives to state and federal governmental agencies. Currently, the FCC is considering a new Open Internet Order that would have considerable negative effects on consumers…”

President Obama has come out in support of net-neutrality rules. Critics argue that the Internet should not, however, be treated as a utility like electricity. Joining Brian Lehrer to dissect both sides are Timothy Karr, senior director of strategy at Free Press, and on Skype from D.C., Geoffrey Manne, founder of the International Center for Law and Economics.

http://youtu.be/s7bnaPaIpS4?t=13m44s

Panelists talked about the concept of “open Internet,” also know as “net neutrality,” and whether the Internet is a public utility. “Open Internet” refers to the idea that Internet providers must allow all legal content to move through their networks uninhibited. At the time of the program, the Federal Communications Commission was considering a plan that would allow the agency to regulate how Internet traffic flows between content providers and Internet service providers, and was expected to issue a final rule by the end of 2014.

Summary

“The International Center for Law & Economics (“ICLE”) and eleven independent professors and scholars of law and economics file these comments to address general merger review issues and certain specific concerns that were raised in some of the Comments and Petitions to Deny filed in this proceeding…”

“The FCC’s inquiry is limited to the proposed merger’s likely effect on the public interest. But many of the comments in opposition to the merger take issue with various aspects of the marketplace for residential broadband and video as it exists to- day. Indeed, much of the criticism seems leveled at decisions made decades ago with regard to cable franchising. But those criticisms, whether valid or not, do not speak to whether – against the backdrop of the relevant markets as they exist today and are likely to exist in the near future – the merger of Comcast and Time Warner Cable (“TWC”) is in the public interest. Among many other things, for example, the Comments of the American Antitrust Institute urge the FCC to consider the issue of network neutrality in reviewing the merger. But there is nothing merger-specific about net neutrality, and consideration of that issue (other than as a potentially relevant aspect of the market backdrop) is wholly inappropriate for merger review….”

Excerpt

Meet iHolo. This innovative (though hypothetical) startup sells a tiny cube that hooks into smartphones and projects a holographic image above the screen. Now we can see actual 3D holographic characters and movie explosions, hovering right in front of us! There’s just one problem: “Holovids” require an incredibly fast connection, and tons of bandwidth. The typical smartphone user has neither the speed nor the data capacity to use the new technology: after extended buffering waiting for the holovid to load, a user would exhaust his data plan within minutes.

Worried that users won’t materialize, iHolo offers a deal to the big wireless carriers: To any carrier that will boost the speed of iHolo customers and exempt iHolo material from users’ data caps, iHolo will sell a minority interest in its fledgling company.

It’s a potential win-win. iHolo gets access to much-needed capital, boosts demand for its product, and gains the stability that comes from having a big backer. That institutional support would mollify investors who would otherwise be wary of betting on an unproven technology. The carrier could differentiate itself in the wireless market, and the two companies could work together to figure out how to stream holovids efficiently.What’s not to love? Well, the business model that could make this innovation possible isn’t “neutral.” It could be banned if Net neutrality hardliners get their way.

Net neutrality — the idea that all data should be treated the same as it zips over the Internet — sounds appealing in principle. Who wouldn’t want every competitor to have a fair shot, and for the best ideas to rise to the top? But in practice, rigid Net neutrality regulation could cripple the potential business arrangements that help launch new companies.

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