Rick Carnes understands

Posted September 30th, 2010 in Broadband, economy, FCC, Government Regulation, Internet, net neutrality and tagged , , by Alton Drew

To say that am blown away by Rick Carnes’ admonishment of Free Press today would be the understatement of the decade. Mr. Carnes’ assessment of Free Press’ approach to its campaign for net neutrality hit on an important and too often overlooked principle: that policy should address economic growth. This oversight has been my biggest issue with the net neutrality policy and is my biggest issue with any policy that comes out of Washington.

Even if you totally disregard the arguments of net neutrality opponents (something I would not advise were it not for sake of argument), the arguments of net neutrality proponents lay totally flat and hollow because for all their hell raising and name calling, no one in the Free Press camp has yet to make an economic, pro-growth argument that substantiates net neutrality as a viable, job creating policy. Not one.

Free Press and their associates have been so focused on spewing anger and sarcasm that even their definition of net neutrality has changed, going from the “we have to save the Internet from corporations” to, “net neutrality is synonymous to civil rights.” This is what happens when your approach is based on anger and spewing vile as opposed to sound political economy.

Mr. Carnes and I may be on opposite sides of the political spectrum, but when it comes to acknowledging the principles of reason and focusing on substance, Rick Carnes gets it. Now if only Free Press can step back, take a breath, and reassess.

Extending program access rules to online video is wrong

Interesting piece in The Wall Street Journal about the Comcast-NBC/Universal merger. The issue is whether Comcast post-merger should be required to provide access to its own content to competitors, specifically online video content providers. My answer is no.

Will start up firms like Sizmo be willing to pay the license fees for public performances or will they complain to the FCC about that as well?

Seems to me that the program access rules that require cable companies share access with direct broadcast satellite providers should be abandoned, not expanded to include online video content providers such as Sizmo.

I’m sure there are a number of unemployed writers, actors, musicians, etc., that can be tapped by these start up content providers to create and disseminate their own content rather than biting on a competitors intellectual property.

Also, this sounds like a first test for corporate speech. Abrogating the right to share information and property with the entity of your choice was not envisioned by the country’s founding fathers and is out of step with today’s values of fairness.

Net neutrality losing its steam

Posted September 29th, 2010 in economy, FCC, Government Regulation, Internet, net neutrality and tagged , , , , by Alton Drew

It’s not surprising that net neutrality is not the hot topic of discussion it was last year. What is really surprising is that it was a topic of discussion at all. Net neutrality as a concept does nothing for economic growth. Net neutrality may create a few more jobs in the FCC’s consumer complaint bureau, but that would be it.

Net neutrality would also encourage what I call a stagnant techno-state. Instead of pursuing a business model that would generate great amounts of traffic thereby challenging Facebook and Google, net neutrality proponents would rather that broadband access providers give equal treatment to content provided by entities whose per unit traffic costs are much higher than that of larger providers. This is economics at its poorest.

Probably the biggest reason that the net neutrality argument is running out of steam is that its supporters are losing credibility. Net neutrality proponents have been advocating that the FCC ignore the courts and circumvent the Congress. The call for reclassifying broadband by implementing a rule with no Congressional authority borders on reckless. Do we really want to set a precedent of letting a reckless agency dictate policy that is not supported by Congress?

Talk about poor economics. Why waste time pursuing policy that will be challenged in the end and thrown out by the courts for the very reason the courts told the FCC not embark on it?

Genachowski’s FCC has no political capital left

“To the extent that any FCC chairman has any political capital, they have it in their first year,” said Derek Turner, research director at Free Press, as quoted by The Wall Street Journal. At 15 months or so into the job, Federal Communications Commission chairman Julius is out of political capital alright.

The FCC right now looks like a shooting range with spent cartridges laying around and staffers reeling in those paper targets showing nary a shot hitting the center. Between putting together a national broadband plan, delivering it to Congress late, drafting net neutrality rules, and scheming to circumvent Congress with a plan to reclassify broadband access as telecommunications, Mr. Genachowski has nothing to show for it.

Free market conservatives want the FCC reeled in while left-wing, regulation-favoring liberals see Mr. Genachowski as abandoning the Obama agenda on net neutrality. No, he can’t win for losing.

So, how did Mr. Genachowski blow his wad of capital? He presumed the broadband access market needed to be regulated because we are allegedly number 19 on some global list. He presumed that companies like Verizon that spent billions of dollars rolling out Fios to customers demanding broadband weren’t capable of exercising business judgment when delivering broadband services. Mr. Genachowski erred by sending loud, clear signals to Congress that he was going to reclassify broadband access as telecommunications, in spite of a court ruling saying that he needed Congressional authority to do so.

In short, Mr. Genachowski lost his capital when he forgot to read his copy of the Constitution and failed to give free markets a chance.

Jay Rockefeller needs to get with the program

Henry Waxman understands the dilemma the Democrats face this November. With the public showing its growing displeasure with the overly interventionist initiatives of the Democrats, the last thing the Democrats need is the FCC implementing a vice-grip on the broadband access market; a grip that would eventually harm consumers with higher prices and fewer innovative products.

Waxman’s middle of the road approach honestly surprises me, but I respect his attempt to codify what’s already being done in terms of network openness. Not applying the four principles to mobile access makes sense. Why stifle innovation in the wireless broadband market now, especially given the FCC’s recent reaffirmation of its rules that open up white spaces to mobile broadband access providers. Let the wireless market blossom before trying to place brakes on it with unnecessary regulations.

The irony of Mr. Rockefellers preference for reclassification of broadband access effectively as a telecommunications service is that the regulatory burdens that would follow with such regulation would have a negative effect on minority access to the Internet. A disproportionate number of African American and Hispanic households access the Internet via wireless devices. Burdening wireless broadband access service with onerous Title II rules will make mobile access more expensive for these communities.