PeerFlow

Economists still calling computer networks "virtual" while interconnectivity is exposing economic externalities

While artists and designers have discovered there's no sharp distinction between "real" and "virtual" (aka the New Aesthetic), economists are still talking about "virtual", even as the networks of computers they're referring to are exposing the economic externalities the greed of the "first economy" is built on.

Bill Davidow wrote for the Atlantic 10 April 2012, How Computers Are Creating a Second Economy Without Workers,

"Twenty years ago, if you went into an airport you would walk up to a counter and present paper tickets to a human being. That person would register you on a computer, notify the flight you'd arrived, and check your luggage in. All this was done by humans."

Well, except for that part about "a computer". And the flight computers in the airplane. And the FAA computers. And....

This is also true:

"Today, you walk into an airport and look for a machine. You put in a frequent-flier card or credit card, and it takes just three or four seconds to get back a boarding pass, receipt, and luggage tag. What interests me is what happens in those three or four seconds. The moment the card goes in, you are starting a huge conversation conducted entirely among machines. Once your name is recognized, computers are checking your flight status with the airlines, your past travel history, your name with the TSA (and possibly also with the National Security Agency). They are checking your seat choice, your frequent-flier status, and your access to lounges."

While Bruce Sterling can (rightly, I think) say that's not AI, nonetheless it all happens without much human intervention. And pixelated images of airplanes don't start to indicate what's going on in there.

The punchline:

"Here's the challenge: In the past, every million-dollar increase in economic output generated on the order of ten jobs. In the future, in the productive Second Economy, it may generate only one or two."

That's not new. I'm a farmer, and 90% of farm jobs in this country

Against SOPA and PIPA, for an open Internet

If you haven't heard of SOPA and PIPA, you will today, as reddit, Wikipedia, Google, Craigslist, Free Software Foundation, and many other websites protest those Internet censorship bills today. The so-called Stop Online Piracy Act (SOPA) is a House bill (H.R.3261) and the so-called PROTECT IP Act (PIPA) is a Senate bill (S.968) (most recently renamed Preventing Real Online Threats to Economic Creativity and Theft of Intellectual Property Act of 2011). Both have nothing to do with promoting creativity and everything to do with giving a few large copyright holders priority over the Internet, requiring censorship of links to entire domains. Have you heard of the Great Firewall of China? That's where the Chinese government censors entire domains such as facebook, youtube, and twitter because they contain some content that the Chinese government doesn't want distributed. SOPA and PIPA would do the same thing, except putting Hollywood in charge of what would be censored. In a perfect example of the DC lobbying revolving door, former Senator Chris Dodd, now Chairman of the Motion Picture Association of America, called the anti-SOPA blackout an "abuse of power". Funny how it's only an abuse of power when we fight back.

If you don't believe me, listen to Mythbuster Adam Savage.

Here's a technical explanation. And here's a letter of objection many of the engineers who built the Internet.

Here's where the anti-SOPA blackout started:

Eyes on their lobbyists' bank accounts

The plutocrats and their bought politicians don't care about Internet free trade, but we should.

Scott Bradner almost gets it about the opposition to net neutrality in Eyes in their ankles: The congressional view of network neutrality:

If you work at a company that uses the Internet to sell to customers or to buy from suppliers you should care about the net neutrality discussion.

You should, but you probably don't have the money to buy some politicians to do something about it, and unfortunately the biggest companies do, and they're busy doing just that:

Sterling: Samizdat Quality Quality Oligarch Press

Bruce Sterling,, who has studied and practiced paper and online media his en tire career, and who also traveled to the USSR and then to Russia, says Prof. Clemons hasn't imagined the worst:

(((Well, no -- the "worst" would be that the publishers keep grinding out product, only it's evil propaganda entirely subsidized by ultrawealthy moguls who have made themselves the only public source of news and culture. In other words, the commercial press collapses and it's replaced by a classically fascist press. (Likely run on bailout money.) THAT's the worst -- with the possible exception of a furious proletarian upheaval that forces everyone to read grimy, poorly-printed copies of PRAVDA.)))

It would be easy to see a path from where we are now (half of U.S. media is owned by only five companies that actively suppress stories they don't want to hear and promote stupid ones they do want) to Bruce's scenario.

Lessig's Herculean Holiday Present: Reboot the FCC

Here's a good test for the new U.S. Executive: to recognize that steady pragmatism means radical change, starting with the FCC:

The solution here is not tinkering. You can't fix DNA. You have to bury it. President Obama should get Congress to shut down the FCC and similar vestigial regulators, which put stability and special interests above the public good. In their place, Congress should create something we could call the Innovation Environment Protection Agency (iEPA), charged with a simple founding mission: "minimal intervention to maximize innovation." The iEPA's core purpose would be to protect innovation from its two historical enemies—excessive government favors, and excessive private monopoly power.

—Reboot the FCC, We'll stifle the Skypes and YouTubes of the future if we don't demolish the regulators that oversee our digital pipelines. By Lawrence Lessig, Newsweek Web Exclusive, 23 Dec 2008

Lessig gets the connection with his old topic of intellectual property and copyright. Those are monopolies granted by the federal government, and they have been abused by the monopoly holders just like the holders of communication monopolies:

L.A. Times to cut 250 Jobs: Less Free Press; More Need for a Free Internet

There's good news and there's bad news:

The Los Angeles Times on Wednesday announced plans to cut 250 positions across the company, including 150 positions in editorial, in a new effort to bring expenses into line with declining revenue. In a further cost-cutting step, the newspaper will reduce the number of pages it publishes each week by 15%.

"You all know the paradox we find ourselves in," Times Editor Russ Stanton said in a memo to the staff. "Thanks to the Internet, we have more readers for our great journalism than at any time in our history. But also thanks to the Internet, our advertisers have more choices, and we have less money."

— Los Angeles Times to cut 250 jobs, including 150 from news staff, By Michael A. Hiltzik, Los Angeles Times Staff Writer, July 3, 2008

One reason for these cuts is the housing downturn in California: fewer real estate ads. But there are deeper reasons:

Announcements of hundreds of reductions were issued only last week by dailies in Boston, San Jose, Detroit and elsewhere. Among Tribune newspapers, the Baltimore Sun said it would cut about 100 positions by early August and the Hartford Courant announced plans to cut about 50 newsroom positions. The New York Times and the Washington Post both instituted layoffs or buyouts to reduce their staffs this year.

Besides the changes in the newspaper industry, Tribune carries the burden of about $1 billion in annual payments on its debt, much of which it took on to finance the $8.2-billion buyout.

Sure, it's happening everywhere. But the L.A. Times is one of the best sources of journalism around. Why did somebody find it worthwhile to buy it out just to load it up with debt and force layoffs?

Whether this newspaper was targetted or not, the handwriting is on the wall for fishwraps. They'll either adapt to the Internet or die. I suspect many of them will die. That means we'll lose many of our traditional sources of real reporting. Fortunately, some new sources are arising, such as Talking Points Memo, which bit into the Justice Department scandals and hung on like a bulldog. Yet blogs like that thus far have a tiny fraction of the resources of big newspapers like the L.A. Times, the New York Times, and the Washington Post. There's going to be a time of unsettlement of the fishwrap plains while the new shops in cyberspace put down roots into the old country.

And we won't have ready access to either the remaining existing newspapers worldwide or to the new online sources of reporting unless we have a free Internet. Yet another reason that net neutrality is important.

Yet another reason not to let the telcos get away with retroactive immunity. Remember, the telcos currently paying off Congress are the same companies that want to squelch net neutrality. If they can get away with handing over every bit to the NSA yesterday, why would they stop at squelching your P2P today?

-jsq

ATCA Again: Duopoly Against VoIP Long Before Video

Back in 1995, an organization calling itself AMERICA'S CARRIERS TELECOMMUNICATION ASSOCIATION ("ACTA"), petitioned the FCC to regulate Voice over IP (VoIP) services. The gist of the matter was:

Permitting long distance service to be given away is not in the public interest.

In other words, if the telcos couldn't make money off of it, nobody should.

A usually reliable source says:

The ACTA petition was the first time that the FCC confronted VoIP as a policy issue. The FCC, however, never acted on the ACTA petition, and ACTA, the moving party, no longer exists. The question presented by the ACTA petition was whether the FCC had regulatory authority to regulate VoIP Internet software used by individuals to do telephony with each other, with no service provider in the middle.

— VoIP: ACTA Petition, Cybertelecom

It's interesting that the same telcos that now rail against regulation were happy to try to use it back in 1995 when it suit their purposes.

So ATCA failed to control VoIP via FCC regulation. But they can use volume charging to eliminate both VoIP and video they don't provide themselves.

The duopoly's claims of a few people using too much traffic are a smokescreen. The real issue is control: they want to control what passes through "their" networks so they can profit by as much of it as possible. I have no objection to telcos and cablecos making a profit. I do object to them squelching everybody else to do so. On the Internet you can connect any two tin cans, unless the duopoly can cut your string.

-jsq

Porter's Five Forces and Net Neutrality: What If Distribution Channels are Open?

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.

— The Five Forces/Circles of Hell, a Private Equity Professional, Going Private, 27 April 2008

The article goes on to detail how Blockbuster used the old Porter model of closed distribution channels and Netflix used an existing open distribution channel: the U.S. Postal Service.

To spell out the telco connection:

Postal Hikes and Time Warner's Role Discovered by New York Review of Magazines

The New York Review of Magazines catches up with Time Warner and the postal rate hikes it lobbied for and got. First, the bottom line:

...the true price of letting corporations shape government policy: free speech.

— Going Postal, Callie Enlow, New York Review of Magazines, 2008

The NYRB gets into some of the underlying political machinations:

Even Time Warner was taken aback. Halstein Stralberg, co-creator of Time’s rate proposal, said, “There was a new chairman at the commission and there was a totally new environment, and they adopted it, to my surprise.”

The NYRM noted the sudden parachuting in of a new chairman just before the decision as unusual:

In the corporate world, The Progressive Populist would most likely be forced out of business. But should the same rules apply when the product is ideas and the conduit is a government-owned monopoly? To the current administration, the answer is yes, said Cullen. The president appoints the five commissioners that compose the Postal Regulatory Commission. Between the 2005 Time Warner complaint, when the PRC rejected the corporation’s proposed rate restructuring, and the 2006 rate hearings, when the PRC adopted the suggestions almost verbatim, two new commissioners joined the PRC. One of them, Dan G. Blair, replaced George Omas as chairman just one month before the end of the rate cases, a move that Bob Cohen described as “pretty unusual.”

However, the NYRM didn't follow up on the other chairman, the chairman of the Postal Board of Governors from January 2005 to January 2008, James C. Miller III, and his 27-year-old theory:

"...none should be favored and none benefited. Each party pays the cost of service it consumes, not less, and does not bear the cost of others’ consumption."

Curious how someone with that philosophy should be chairman just at the time the decision was made.

The NYRM does say what happened, why it was unusual, and who it affected:

Fair Trade: Fixing Antitrust for the Internet

So suppose for the moment that net neutrality is an antitrust issue. Does this bill fix antitrust law enough to deal with it?

Federal lawmakers have introduced yet another network neutrality bill, but this time with a focus on fair trade issues.

This week, U.S. Rep. John Conyers, who chairs the House Judiciary Committee, has introduced legislation that addresses the issue by labeling it an antitrust matter. Conyers' H.R. 5994 would ban discriminatory network management practices by amending the Clayton Act.

The bill, labeled the Internet Freedom and Nondiscrimination Act, would require carriers to promote competition and allow people to use any device they want to on the carriers' networks. The bill makes exceptions for emergencies, criminal investigations, parental controls, marketing, and improvements to quality of service.

Under the Detroit Democrat's proposed legislation, ISPs could give preference to certain types of data, but they must give the preference regardless of the data source. It would ban ISPs from discriminating based on content, applications, or services.

— Lawmakers Eye Net Neutrality As Anti-Trust Issue, The Internet Freedom and Nondiscrimination Act would require carriers to promot e competition and allow people to use any device they want to on the carriers' networks. By K.C. Jones, InformationWeek, May 9, 2008 05:42 PM

And does this fix the problems Google and Ebay complain about?

Meanwhile, a cosponsor sums it up:

U.S. Rep. Zoe Lofgren, D-Calif., has co-sponsored the legislation.

"Recent events have shown that net neutrality is more than a hypothetical concern. We need a meaningful remedy to prevent those who control the infrastructure of the Internet from controlling the content on the Internet," Lofgren said. "This legislation will help guarantee that the innovative spirit of the Internet is not trampled."

-jsq

Sensing History: Yoo Re Cherry

Dave Farber posted a response by Chris Yoo to Barb Cherry's post about myths and historical errors. Here's Chris's reponse in full. To me, it seems that he is conceding that she's right about the history, that antitrust says nothing about ISP competition, and that a few ISPs control most of the Internet in the U.S. But read it for yourself:

From: Christopher S. Yoo [mailto:csyoo@law.upenn.edu]

I don't pretend to be an expert on the history of common carriage regulation. Barbara has spent far more time thinking about this than I have, so I always appreciate hearing her reactions and learn from reading her work. That said, here are a few thoughts.

It is true that common carriage long predates both the Granger Movement and the Interstate Commerce Act of 1887. That said, one of the central problems is that the historic justifications for common carriage have not aged very well. Often times the common carriage obligations were regarded as a quid pro quo for a government grant of some economic privilege. Other times they were justified because the industry was "affected with a public interest," a concept that is usually traced to the landmark Supreme Court case Munn v. Illinois (1876). The Supreme Court struggled to imbue that standard with content (along with a number of early treatises trying to make sense of the concept) and would ultimately abandon it as analytically empty in Nebbia v. New York (1934). Legal scholars, such as Thomas Nachbar and James Speta in addition to Barbara, have attempted to recover lessons from this era. I have never spoken to Barbara about this in particular, but both Tom and Jim have noted the difficulty in extracting any useful lessons from the history.

The rest after the jump.

Myths and Historical Errors: Cherry Re Yoo

Dr. Barbara Cherry sent me a response to Dr. Chris Yoo's "novel" opinion of her antitrust theory. Dave Farber posted Barb's comments on his Interesting People list, although without her postscript with the pointer to her articles and book. Farber appended a response from Chris, which I'll post separately.

From: "Cherry, Barbara" <cherryb at indiana.edu>
Date: Fri, 9 May 2008 18:28:04 -0400
Subject: Re: Prof. Yoo responds for Prof. Farber

John,

Christopher Yoo's response unfortunately contains several historical analytical errors that I've repeatedly discussed in my writings. It is unlikely that he actually read my TPRC paper to which you provided a link in our blog, as he would have readily discovered some of them.

Perhaps the fundamental problem is that many economists and legal scholars commenting on the network neutrality debate DO NOT understand the history of common carriage. Under the common law, common carriage obligations were TORT obligations imposed on carriers (in their relationship with customers) simply by virtue of their status of engaging in the business. In other words, the obligations are STATUS-BASED and unrelated to the industry's market structure. Attributing the imposition of common carriage obligations to natural monopoly is a MYTH, unfortunately so often erroneously repeated in the secondary literature that it is believed to be true.

The rest after the jump.

Social Welfare: Reed Asks Yoo

David P. Reed asks a question and Christopher S. Yoo responds on Farber's Interesting People list. I'm posting both in full here, with my thoughts at the end; basically, law isn't a science, and anecdotes can turn into legal cases; some have already regarding net neutrality.

From: David P. Reed [dpreed@reed.com]
Sent: Saturday, May 10, 2008 11:50 AM
To: David Farber
Cc: ip
Subject: Re: [IP] re-distribution of op-ed on Net Neutrality -- a reaction and a reply from one of the authors

I read through the long comment by Chris Yoo below, and as a non-lawyer interested in policy, I ask the following simple question:

Is there a well-regarded (one might ask for scientifically reasoned) argument that antitrust law as currently interpreted and practiced has a substantial impact measured in some currency like $ on social welfare?

Otherwise this entire argument is about nothing more than vaporware proceeding from a faith that competition (however loosely defined) creates social welfare best. AFAIK, this is largely an article of faith, just as the "End of History" was a grand article of faith posited by many of the same people as "truth".

It is just not fair to imply that the core of "today's settled antitrust law" carries even the level of weight as Darwin's Theory of Evolution. There have been no replicable studies of its practice.

Law professors and lawyers who don't challenge its truthiness squarely are merely behaving as dogmatic mandarins always do - asserting authority of professional status, rather than rigor of reasoning, experiment, or argument.

I say this not as FOX News or Hillary Clinton would call an elitist, but as a person who genuinely is unconvinced by magical faith in authorities.

That's Reed's question. Yoo's response, and my thoughts, after the jump.

Novel Point of View: Dr. Chris Yoo's Opinion of Dr. Barbara Cherry's Antitrust Opinion

I previously posted a pointer to Barbara Cherry's examination of antitrust history in response to Dave Farber's posting of an op-ed against net neutrality. Dave responds:

( INDEED I AM NOT A LAWYER AND SO I ASKED PROF. YOO, ON THE FACULTY OF PENN LAW AND ONE OF THE AUTHORS OF THE EDITORIAL, TO REPLY TO THIS NOT -- IN PARTICULAR PROF. CHERRY'S COMMENTS. DAVE FARBER)

— re-distribution of op-ed on Net Neutrality -- a reaction and a reply from one of the authors, David Farber, Interesting People, Fri, 9 May 2008 15:23:10 -0400

Here's Prof. Yoo's response:

From: "Christopher S. Yoo" <csyoo@law.upenn.edu>
Date: May 9, 2008 2:51:40 PM EDT
To: "David Farber" <dave@farber.net>
Cc: "Faulhaber, Gerald" <faulhabe@wharton.upenn.edu>

Dave Farber forwarded me a recent e-mail asking for a lawyer's reaction to Barbara Cherry's recent presentation and paper questioning whether antitrust law can protect against the harms envisioned by network neutrality proponents. As the only lawyer among the co-authors of the op-ed that Dave, Michael Katz, Gerry Faulhaber, and I worked up for the Washington Post, I am happy to offer a few thoughts. (Those interested in a different take on the relationship between network neutrality and antitrust law may want to look here: http://ssrn.com/abstract=992837.)

Barbara's work is based on a theory advanced by Neil Averitt and Robert Lande that would place consumer choice at the center of antitrust policy. As Averitt and Lande explicitly recognize, their theory would represent a fairly significant break (they would call it a paradigm shift) away from current antitrust law, which focuses on maximizing economic (and particularly consumer) welfare.

Interestingly, antitrust law once was quite friendly toward the consumer choice perspective that Barbara favors. (I review these developments in vol. 94 of the Georgetown Law Journal at pages 1885-87, http://ssrn.com/abstract=825669.) Early cases like FTC v. Brown Shoe (1966) and Times-Picayune Publishing v. United States (1953) invalidated exclusive dealing and tying contracts (which are among the types of antitrust practices most similar to network nonneutrality) because they infringed on unfettered consumer choice.

The rest of Dr. Yoo's response after the jump, and my response in a following post.

Murdoch Wants Another NYC Newspaper

Rupert Murdoch AP Photograph

Four months after Rupert Murdoch bought the Wall Street Journal, the editor quit. Murdoch already owns the New York Post. Now he wants to buy Newsday. Nevermind that such a purchase would be illegal. The good money is on Kevin Martin's FCC letting it happen anyway. After all, if he doesn't need a law to enforce, what's to stop him not enforcing the laws he's already got?

Despite having had no success at preventative or forensic oversight of the FCC, Congress is going to give it another go:

However, the looser ownership rules the FCC passed in December - over an outcry from many interest groups - has stirred criticism from many in Congress, suggesting that Murdoch's Newsday bid faces the first stirrings of a backlash.

The commerce committee in the Senate yesterday approved a "resolution of disapproval" measure that would overturn the new ownership rules, creating more of a hurdle for Murdoch.

Senator Byron Dorgan, the measure's leading sponsor, said: "We really do literally have five or six major corporations in this country that determine for the most part what Americans see, hear and read every day. I don't think that's healthy for our country."

Dorgan is backed by 25 senators, including Democratic presidential candidates Hillary Clinton and Barack Obama, and is confident it will pass the Senate. A similar bill has been proposed in the House.

— Murdoch's Newsday bid faces hurdle, Elana Schor, guardian.co.uk, Friday April 25 2008

We'll see if the Senate or Democrats have a spine this time.

Meanwhile, the entire mainstream press, except the New York Times, ignores that the president of the United States admits he personally authorized war crimes. Except for ABC, which broke the story, but then couldn't be bothered to mention it during a "debate" it hosted between the remaining Democratic presidential candidates.

If every other major paper in NYC (and 3 out of the top 10 in the U.S.) is controled by Murdoch, how long before the NYTimes falls prey, too? With net neutrality we can still know about stories like this. Without it?

-jsq

Hamlet in DC: To Legislate or Not to Legislate, That is the Question

The U.S. Senate takes up net neutrality again, to legislate or not to legislate:

At a Senate Commerce Committee hearing entitled "The Future of the Internet" on Tuesday, Democratic politicians argued for passage of a law designed to prohibit broadband operators from creating a "fast lane" for certain Internet content and applications. Their stance drew familiar criticism from the cable industry, their Republican counterparts, and FCC Chairman Kevin Martin, who said there's no demonstrated need for new rules, at this point.

— Net neutrality battle returns to the U.S. Senate, by Anne Broache, C|Net News.com, 22 April 2008

Some of the senators seemed to think the Comcast debacle indicated there was need for legislation:

"To whatever degree people were alleging that this was a solution in search of a problem, it has found its problem," said Sen. John Kerry (D-Mass.). "We have an obligation to try and guarantee that the same freedom and the same creativity that was able to bring us to where we are today continues, going forward."

Kerry is one of the backers of a bill called the Internet Freedom Preservation Act, chiefly sponsored by North Dakota Democrat Byron Dorgan and Maine Republican Olympia Snowe, which resurfaced at the beginning of 2007 but has gotten little attention since. A similar measure failed in a divided Commerce Committee and in the House of Representatives nearly two years ago.

Unsurprisingly, Martin says he doesn't need a law to enforce, because he can make it up as he goes along:

Revisionism by PRI

This is amusing:

The attempt to force network neutrality on wireless carriers will result in disaster and is based on faulty assumptions, including one that there ever was neutrality on the Internet, according to a newly released analysis from the Pacific Research Institute (PRI).

— Researcher Rebukes Wireless 'Net Neutrality' Advocates, NewsBreak, Telecomweb - USA, 26 March 2008

Well, I guess that waves away all the well-documented steps the FCC took to strip away common carrier status from each facet of Internet provision

You have to register to read the rest at Telecomweb, but PRI has more, including this rather amusing claim:

PR in China: Monks Burst Into International Press Briefing

This is what you have to do to get media attention if you don't have a free press:

A group of uninvited young monks at the Jokhang Temple, one of the most sacred in Tibet and a top tourist stop in central Lhasa, stormed into a briefing by a temple administrator.

"About 30 young monks burst into the official briefing, shouting: 'Don't believe them. They are tricking you. They are telling lies'," USA Today Beijing-based reporter Callum MacLeod said by telephone from Lhasa.

— Monks burst in on Tibet news briefing, By John Ruwitch, Reuters, Thu Mar 27, 2008 2:59pm GMT

This may be an extreme, but it is what controled media lead to.

-jsq

Big picture: Net Neutrality vs. Social Control by Big Media

Most net neutrality discussions get bogged down in details. This video draws the big picture from the beginnings of the Internet, backwards to the "consolidation" of earlier forms of media such as the printing press and radio, to what the duopoly is trying to do to the Internet.

Do we want the Internet to go the way of newspapers, radio, and TV, and even the postal service, with 90+% of content provided by half a dozen big corporations and only op-eds and heavily selected and edited letters permitted from the great unwashed? Hey, they've got that in China, and there most of the population believes that Tibetans are barbarian recipients of superior Chinese culture, so Chinese troops are totally justified in squashing any ungrateful opposition. We could return to depending on the traditional media in the U.S.; after all, they only helped lie us into a war of choice in Iraq, costing $2 billion a week that we could be using to deal with education, health care, and preserving the natural world. Or we can fight for Internet freedom.

-jsq

Jettisoned: 8 Centuries of Common Carriage Law

Someone at CAIDA (presumably kc Claffy by the writing style), went to

an invitation-only intensely interactive workshop on the topic of Internet infrastructure economics. participants included economists, network engineers, infrastructure providers, network service providers, regulatory experts, investment analysts, application designers, academic researchers/professors, entrepreneurs/inventors, biologists, oceanographers. almost everyone in more than one category.

— internet infrastructure economics: top ten things i have learned so far, by webmaster, according to the best available data, October 7th, 2007

and wrote up a report including this summary of the political situation:

...and it turns out that in the last 5 years the United States — home of the creativity, inspiration and enlightened government forces (across several different agencies) that gave rise to the Internet in the first place — has thoroughly jettisoned 8 centuries of common carriage law that we critically relied on to guide public policy in equitably provisioning this kind of good in society, including jurisprudence and experience in determining ‘unreasonable discrimination’.

and our justification for this abandonment of eight centuries of common law is that our “government” — and it turns out most of our underinformed population (see (1) above) — believes that market forces will create an open network on their own. which is a particularly suspicious prediction given how the Internet got to where it is today:in the 1960s the US government funded people like vint cerf and steve crocker to build an open network architected around the ‘end to end principle’, the primary intended use of which was CPU and file sharing among government funded researchers. [yes, the U.S. government fully intended to design, build, and maintain a peer-to-peer file-sharing network!]

That's right folks: "resource sharing" was the buzzword back then, and every node was supposed to be potentially a peer to every other.

Internet Freedom Policy Act

Rep. Ed Markey (D-MA) and Rep. Chip Pickering (R-MS) have introduced the Internet Freedom Preservation Act of 2008, which will amend Title I of the Communications Act of 1934 to say Internet freedom, commerce, innovation, participation, and speech are the policy of the United States. It's interesting what this bill does not say. It doesn't specify any regulations, so that those who oppose net neutrality don't have a leg to stand on when they say net neutrality is all about regulation. It doesn't say "net neutrality": it says "freedom", "marketplace", "innovation", and other positive benefits. (I think I'll take a cue from Commissioner Copps and start referring to Internet freedom.) It doesn't say "consumers" except a few times, including once where that word is immediately qualified by

(i) access, use, send, receive, or offer lawful content, applications, or services over broadband networks, including the Internet;

Let's see, if "consumers" can send their own content, applications, and service, they're not really consumers in the traditional sense, now are they?

This is all very nice, in that Markey and Pickering apparently get it about what Internet freedom is about. However, why does this bill have no teeth, unlike Markey's bill of last year or the Snowe-Durgan bill before that?

Canadian Net Neutrality

In Canada, an ISP has even gotten up to blocking striking employees' website:

During the Telus strike in 2005, the corporation blocked access to a website run by striking Telus employees called “Voices for Change” (and at least 766 other websites). Those familiar with network-control issues in Canada also accuse Rogers and Bell of limiting peer-to-peer (P2P) applications, which people use to share audio, video and other digital data with one another. So, here we have ISPs blocking or at least limiting the use of what is likely the most innovative, creative and participatory use of the Internet. In response to customer concerns, Bell recently admitted that they “are now using Internet Traffic Management to restrict accounts that are using a large portion of bandwidth during peak hours. Some of the applications that are included are the following: BitTorrent, Gnutella, LimeWire, Kazaa….”

— The Fight for the Open Internet, Steve Anderson, Canadian Dimension magazine, January/February 2008 issue

The rest sounds very familiar:

AT&T Filtering: Has Tim Wu Not Been Paying Attention?

Katharine Graham by Diana Walker

Tim Wu asks in Slate: Has AT&T Lost Its Mind? It seems he's discovered that:

Chances are that as you read this article, it is passing over part of AT&T's network. That matters, because last week AT&T announced that it is seriously considering plans to examine all the traffic it carries for potential violations of U.S. intellectual property laws. The prospect of AT&T, already accused of spying on our telephone calls, now scanning every e-mail and download for outlawed content is way too totalitarian for my tastes. But the bizarre twist is that the proposal is such a bad idea that it would be not just a disservice to the public but probably a disaster for AT&T itself. If I were a shareholder, I'd want to know one thing: Has AT&T, after 122 years in business, simply lost its mind?

No one knows exactly what AT&T is proposing to build. But if the company means what it says, we're looking at the beginnings of a private police state. That may sound like hyperbole, but what else do you call a system designed to monitor millions of people's Internet consumption? That's not just Orwellian; that's Orwell.

— Has AT&T Lost Its Mind?A baffling proposal to filter the Internet. By Tim Wu, Slate, Posted Wednesday, Jan. 16, 2008, at 10:15 AM ET

Come now; what did you think they were up to?

Forensic FCC Oversight

Preventive Congressional oversight had no effect on the FCC. We'll see if forensic oversight does any better:

Bipartisan leaders of the House Energy and Commerce Committee launched an investigation of the Federal Communications Commission on Tuesday, three weeks after the agency's controversial vote to ease media ownership restrictions.

In a letter sent to FCC Chairman Kevin Martin, the committee asked that all electronic records and personal e-mails related to FCC work be saved.

The committee has "initiated a formal investigation into FCC regulatory procedures to determine if they are being conducted in a fair, open, efficient, and transparent manner," said the letter written by Chairman John Dingell, a Michigan Democrat, and ranking Republican Joe Barton of Texas.

"This investigation will also address a growing number of allegations received by the committee relating to management practices that may adversely affect the agency's operation," the letter said.

— House panel launches probe of FCC practices, Reuters, Tue Jan 8, 2008 4:15pm EST

Maybe Congress will slap the FCC with another stern letter. I'm sure Kevin Martin is quaking in his boots.

-jsq

FCC: Shocked to Hear There's Gambling Going On!

The dateline is ironic:

LAS VEGAS (AP) — The Federal Communications Commission will investigate complaints that Comcast Corp. actively interferes with Internet traffic as its subscribers try to share files online, FCC Chairman Kevin Martin said Tuesday.

A coalition of consumer groups and legal scholars asked the agency in November to stop Comcast from discriminating against certain types of data. Two groups also asked the FCC to fine the nation's No. 2 Internet provider $195,000 for every affected subscriber.

"Sure, we're going to investigate and make sure that no consumer is going to be blocked," Martin told an audience at the International Consumer Electronics Show.

—FCC to Probe Comcast Data Discrimination, By PETER SVENSSON, AP, 8 Jan 2008

In other news, Las Vegas Board of Realtors announces investigation of gambling! Sorry; I made that up.

Note that Martin is not only chair of the FCC that continues to enable telecom and media consolidation, he also continues to refer to ISP customers and participants as "consumers", as in the old broadcast model where the broadcasters produce and you the customer are expected to consume whatever they give you.

The organization doing the most investigating of stifling, blocking, etc. by Comcast, Cox, et al., has been the Associated Press, which also originated this story. Interestingly, the AP is not owned by any of the usual five companies that own most of the media in the U.S. The AP is a non-profit cooperative owned by its contributing newspapers. So one of the few national news organizations in the U.S. that has not been consolidated is the one that has been investigating stifling by ISPs.

-jsq

PS:

"I'm shocked, shocked to find that gambling is going on in here!"

—Captain Renault, Casablanca, 1942

Censored News 2007

As usual, net neutrality was the top censored news story of 2007:

Throughout 2005 and 2006, a large underground debate raged regarding the future of the Internet. More recently referred to as “network neutrality,” the issue has become a tug of war with cable companies on the one hand and consumers and Internet service providers on the other. Yet despite important legislative proposals and Supreme Court decisions throughout 2005, the issue was almost completely ignored in the headlines until 2006.1 And, except for occasional coverage on CNBC’s Kudlow & Kramer, mainstream television remains hands-off to this day (June 2006).2

Most coverage of the issue framed it as an argument over regulation—but the term “regulation” in this case is somewhat misleading. Groups advocating for “net neutrality” are not promoting regulation of internet content. What they want is a legal mandate forcing cable companies to allow internet service providers (ISPs) free access to their cable lines (called a “common carriage” agreement). This was the model used for dial-up internet, and it is the way content providers want to keep it. They also want to make sure that cable companies cannot screen or interrupt internet content without a court order.

— #1 Future of Internet Debate Ignored by Media, Top 25 Censored news stories of 2007 Project Censored, The News That Didn't Make The News Sonoma State University, 2007

This is the first I've heard that "Internet service providers" other than cable companies are on the side of consumers. Doubtless AT&T will be gratified to hear that version. Oh, wait: later the same writeup refers to "cable supporters like the AT&T-sponsored Hands Off the Internet website." Also, what's this about free access?

Consolidation Flood: What Will Really Stifle Internet Innovation

Advocates of the "exabyte flood" political campaign against net neutrality claim they are for innovation and that the coming flood of Internet usage will stifle innovation unless they get their way.

What will really stifle innovation on the Internet is this:

The Federal Communications Commission, at the urging of Chair Kevin Martin, voted 3-2 on Tuesday to relax longstanding rules that block corporations from owning a broadcast TV station and a newspaper in the same city.

— Uproar Over FCC Vote on Media-Ownership Rules, By Frederick Lane, Top Tech News, December 19, 2007 10:14AM

No, not specifically newspaper and television consolidation. Further consolidation of media and information distribution in the hands of a tiny number of companies. This December the FCC lets newspapers and TV stations consolidate. Last December it let SBC buy Bellsouth. Internet access is already in the hands of a tiny number of companies (typically at most two in any given area) that are increasingly moving to control the information they carry on behalf of a small number of companies including themselves and movie and music content producers.

The exaflood politics isn't really about how much infrastructure the duopoly has to build out. It's about maintaining the duopoly and extending its control of information, to the duopoly's short-term profit and the long-term detriment of of us all, including the duopoly.

-jsq

Edwards on Net Neutrality

Yes and yes:

U.S. presidential candidate John Edwards is for net neutrality, already sent a letter to the FCC about it, and would only appoint FCC commissioners who support it. He also gets the connection with media consolidation:

"What we have to do is make certain the net does not go the way of broadcast television and commercial radio where only a few corporate voices are heard."

John Edwards: Net Neutrality, answering www.10questions.com, YouTube, Dec 2007

Among other candidates, Barack Obama already answered the question. Hm, looks like Huckabee has, too; more on that in another post.

-jsq

Moderate? Comcast Stifling Isn't

Promising unlimited access, not delivering, and refusing to admit it is managing a network for the good of the many above the activities of the few? Pete Abel thinks so:

Earlier this month, Comcast — the nation’s largest cable broadband company — was caught doing what any good Internet Service Provider (ISP) should do, i.e., manage its network to ensure that the online activities of the few don’t interfere with the online activities of the many,

Fair vs. Foul in Net Neutrality Debate, By Pete Abel, The Moderate Voice, 24 November 2007

The problem with Comcast stifling BitTorrent by faking reset packets from a participant is not that Comcast is trying to manage its network: it's that Comcast used a technique that if it came from anyone other than an ISP would be considered malicious denial of service, that Comcast still hasn't admitted doing it, and that Comcast bypassed numerous other methods of legitimate network management, such as those used by PlusNet. Comcast could even use the Australian model and sell access plans that state usage limits and throttle or charge or both for usage above those limits. What Comcast is doing it seems to me is much closer to the false advertising of unlimited access that got Verizon slapped down for wrongful account termination.

The biggest problem with what Comcast (and Cox, and AT&T, and Verizon) are doing is that their typical customer has at most one or two choices, which in practice means that if your local cable company and your local telephone company choose to stifle, throttle, block, or terminate, you have no recourse, because there's nowhere to go. Competition would fix that.

Abel tries to back up his peculiar interpretation of network management with revisionist history:

FT on FCC: SOP

From London, it appears the emperor's apparatchik has no clothes:

The commission, under Mr Martin, has turned US media policy into mere political theatre, while technology marches on apace, revolutionising media markets without any serious input from the regulators in the public debate about the implications.

Big Media control of the airwaves is simply not the threat to democracy and choice that it once was (in the days before cable or, for that matter, bloggers and MySpace). This is yesterday’s battle. It is time to move on to the tougher challenge: how to ensure that quality news survives the YouTube era.

— New rules for yesterday’s problem, Editorial, Financial Times, Published: November 14 2007 19:15 | Last updated: November 14 2007 19:15

Well, the first step would be to ensure that people get to look at it, for example that they are able to view the Financial Times. Economic models would be good, too. Some traditional news media seem to be developing those.

But it is not clear how one troubled industry (newspapers) can be helped by grafting it on to another one (the broadcast media), when both have essentially the same problem: the internet is stealing their advertising revenues.

Well, the New York Times has discovered can make more money by advertising if they don't charge for articles. And that didn't involve merging with a TV station. With real ISP competition, somebody would also develop a real first-mile ISP business plan.

-jsq

FCC: Trick or Treat! Media Consolidation

Today is November First, which is the deadline for comments on the FCC's media consolidation move. There's still no notice on the FCC web pages of a hearing on November 2.

Oh, wait! Kevin Martin held a hearing two days earlier, on Halloween instead! Without ever announcing it on the FCC web pages.

Dissident commissioners Michael Copps and Jonathan Adelstein appeared at a rally outside the FCC's office in Washington to object to Martin's chicanery. "Neither we nor the public received any confirmation that the hearing would occur until ... just 5 business days before the event," the commissioners said before entering the building for the hearing. "This is unacceptable and unfair to the public."

Joining Copps and Adelstein were political, labor and community leaders who condemned Martin's assault not merely on media diversity but on the basic standards for making regulatory shifts.

— No Treats for FCC Chair and Media Monopolists, John Nichols, The Nation, Wed Oct 31, 6:03 PM ET

Jesse Jackson, National Organization of Women, United Church of Christ, Future of the Media Caucus in the U.S. House of Representatives; they all protested.

Martin even has the Parents Television Council against him.

Notice of a meeting only five days before to the other commissioners, and apparently none to the public? You'd think Martin didn't know how to talk to the press. Yet just a few days ago he was chatting with the New York Times about ending cable monopolies to apartments.

I wonder if he told the telcos about that Halloween meeting more than five days before? Nah, that would be corruption.

-jsq

Fitch: More RLEC Consolidation

Likely consolidation in Rural Local Exchange Carriers:

RLECs are experiencing relatively little organic growth, the company says, because the increased revenues from such growing services as high-speed data "have not materially offset declining voice revenues. The erosion of the traditional wireline voice business of the RLECs, mainly by competition from cable multiple-system operators (MSOs) and wireless operators, has already led to some industry consolidation over the past year."

Over the longer term, RLECs also face the uncertain effects of increased competition on service revenues for the rural operators as well as uncertainties on the regulatory side.

"In the absence of meaningful organic growth, acquisitions become a means for rural carriers to increase revenues, cash flow and diversity," says John Culver, senior director at Fitch Ratings.

— Lack Of Growth Could Spell RLEC Demise, TelecomeWeb, 12 Oct 2007

The RCCC acquisition may be one of these.

-jsq

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?