Begin forwarded message: From: Dana Blankenhorn <dana@xxxxxxxxxx> Date: June 21, 2006 11:54:45 AM EDT To: dave@xxxxxxxxxxSubject: Re: [IP] more on Summary for Congress of proposed NN Act Proposal
http://www.danablankenhorn.com/2006/06/10_reasons_for_.html 10 Reasons for the Lack of CompetitionOn Dave Farber's list today Gerry Faulhaber of the Wharton School (right) asked an intriguing question concerning wireless broadband.
Where are the competitors?Five years ago I spent a lot of time covering Wireless ISPs, entrepreneurs (mostly in rural areas) who were using 802.11 to deliver broadband service, often against the Bells.
Given the political contempt people feel for the Bells, there should be more of them. Why aren't there?
Here are 10 reasons:1.. Uncertainty. The Bells have been using the agencies of government to change regulations and drive competitors out of business for several years now. Their monopolies are actually subsidized, through programs like the Universal Service Fund, which by law must flow to the Bells if the Bells want the money. 2.. Backhaul. In many rural areas the Bells offer the only backhaul for a WISP, and they charge prices geared toward keeping their monopoly for it. 3.. Price Wars. As with cable "overbuilds" in the 1990s, incumbents can drop prices and improve service where competition exists, subsidized by captive monopoly customers. 4.. Frequency. If the FCC would open up more unlicensed spectrum, instead of selling every hertz it sees to the incumbents, we'd have more WISPs. 5.. Power limits. The FCC has uniform power limits for unlicensed equipment, which must operate at microwave frequencies. If rural areas had higher limits, WISPs would benefit. 6.. Bandwidth Hogs. A very small minority of WISP customers, mainly engaged in music and/or video hoarding, pushed the industry toward bandwidth limits, limiting their competitiveness. 7.. Rural Industry. The present WISP industry is very rural. Thus the suppliers concentrate on rural WISP problems. Economics of scale have not yet been brought to bear on the mesh gear that would fit suburban or urban environments. 8.. Municipal Broadband Most companies that want to provide WISP services in cities are trying to get concessions in order to become sole providers. This discourages truly competitive entrants. 9.. Sponsors. The owners of competitive backhaul - Level 3 and Google - have not been aggressive in enabling mesh technology sales to entrepreneurs. 10.. Wall Street. Bankers don't want to bank competitive broadband when they see the low profits being reported by the monopolists. Some very simple changes in government policy could change all this in a heartbeat. (They could easily be initiated by FCC chair Kevin <artin, left.) Opening up more unlicensed spectrum. Raising power limits. Enforcing the anti-trust laws.
Fact is the attitude of the present government is to endorse the duopoly because it leaves law enforcement with a small number of chokepoints through which it can monitor all online traffic. It's a quid pro quo that is understood at the highest levels in both the White House and AT&T offices in San Antonio.
An overt conspiracy does not need to exist. This is a nod-and-wink deal. But the fact is U.S. policies at all levels have, for nearly six years, endorsed the re-creation of the Bell monopoly, leaving the U.S. falling behind in the infrastructure which defines 21st century economic success.
Something needs to be done about that. There are things which can be done. But expecting capital to flow into an industry the government is discouraging doesn't mean the science is wrong, or the market has rejected the idea.
It means we need to change the policy. As with energy, get rid of the incumbents' subsidies and create conditions under which competitors can grow.
Dana Blankenhorn dana@xxxxxxx editor www.voic.us ----- Original Message ----- From: "David Farber" <dave@xxxxxxxxxx> To: <ip@xxxxxxxxxxxxxx> Sent: Wednesday, June 21, 2006 10:15 AM Subject: [IP] more on Summary for Congress of proposed NN Act Proposal
Begin forwarded message: From: Gerry Faulhaber <gerry-faulhaber@xxxxxxxxx> Date: June 21, 2006 10:07:41 AM EDT To: dave@xxxxxxxxxx Cc: faulhaber@xxxxxxxxxxxxxxxxx Subject: Re: [IP] Summary for Congress of proposed NN Act Proposal [for IP]Amazingly, I find myself in agreement with Dana Blankenhorn. This business of restricting the use of Internet to only service that follows IETF/RFC protocols really is fairy dust. Does anyone think that customers really care about "IETF/RFC Inside"? In the few minutes since I read Dana's post, I have thought of a dozen names that Comcast/Verizon could call it other than Internet that would work just fine in the marketplace. And what about all the non- complying systems in place today?I also wholeheartedly agree with Dana about making the market competitive as the only true solution to this. However, he seems to think that Congress must act to "take away their monopoly right of way." In fact, Congress already did; the Telecom Act of 96 removed all local monopoly franchises, period. Even further back, there are FCC Pole Attachment rules requiring telephone companies to share their poles at specified rates. Everything is actually in place for competitors to enter.The question is: with all the railing against "monopoly" BB providers, and all the rant about how well it works in Korea, how come we haven't seen competitive entry? And with all the hype about unlicensed wireless as the answer to the maiden's prayer, how come we have almost no private entry into wireless BB (except Clearwire)? I'll bet if all those great entrepreneurs spent less time writing outraged letters to Congress, IP, etc., and more time building a business plan to offer competitive BB, all our problems would be solved. And yet, and yet....where are the competitors? Why so much whining and so little market entry? Come on, guys; if it's a great business for Comcast/Verizon (highly questionable, actually) then it should be a great business for you. Yeah, it's you I'm talkin' to, buddy.Dana has it absolutely right; what he doesn't have (and should have) is a business plan. If he doesn't have it, then why not any of those guys who signed on to the Internet Platform thing?Professor Gerald Faulhaber Wharton School, Univ of Pennsylvania Philadelphia, PA 10194 Professor Univ of Pennsylvania Law School ----- Original Message ----- From: "David Farber" <dave@xxxxxxxxxx> To: <ip@xxxxxxxxxxxxxx> Sent: Wednesday, June 21, 2006 8:19 AM Subject: [IP] Summary for Congress of proposed NN Act ProposalBegin forwarded message: From: Dana Blankenhorn <dana@xxxxxxxxxx> Date: June 20, 2006 2:40:29 PM EDT To: dave@xxxxxxxxxx Subject: Re: [IP] Summary for Congress of proposed NN Act ProposalI so admire the people behind the bill, and I hate to disagree with them, but I do...http://www.danablankenhorn.com/2006/06/dont_call_it_in.html Don't Call it Internet ThenA group of very clever folks -- David Reed, Bob Frankston, Bruce Kushnick, John Mitchell, Dave Weinberger (left), Rahul Tongia, Andy Oram, Steve Cherry, Dewayne Hendricks, John Bachir, Paul Jones and others -- have gotten together to back a "solution" of the network neutrality act dubbed the Internet Platform for Innovation Act of 2006.Here's the full bill. Short version.Define the Internet as neutral, and take away the right of non- neutral Bell and cable offerings to call what they sell "Internet" service.I think of it as magic fairy dust.First, it ain't gonna pass. Second, even if it does, it doesn't matter unless there is real competition in the marketplace, so people can choose "real" Internet service without penalty.May I offer something equally simple, concise and (maybe even) passable? That is, take away their monopoly right of way. Pass a bill which states states, cities and other units of government must make poles and other right-of-way available to competing service providers.Short Version. Take away their monopoly.I compare the situation to what we face with oil refineries. As you may know, gas prices are high, and refinery prices are way up. No new refinery capacity has come on-stream for 25 years. There is no competition in the market, and no incentive for refiners to create new capacity.The solution: open up the market. Open the market to other forms of energy with a price floor under which all forms of energy can find a market, then offer a higher floor to non-carbon processes. Get rid of the subsidies the oil companies now enjoy.The same solution is needed here. The difference between energy and Internet service is that, in Internet service, the cost of provisioning actually is going down, thanks to Moore's Law. The cost of running a bit over fiber continues to go down. The cost of running a bit over the air continues to go down. This is no longer 30-year property (like a refinery). it's fast becoming three-year property, even one-year property. You don't write your PC off over five years anymore -- when it breaks or gets too slow for the new software you buy a new one.The Intenet solution, in other words, is simpler. There are ample new supplies of real Internet bits available. They don't need subsidy. All they need is an opportunity to come to market.Once they do the competition will change the Bells' incentives, and force them to offer more bits, at lower prices, or go out of business.Once this kind of solution was called conservative. Today's conservatives, unfortunately, are too busy sucking at the corporate teat to recall what they're supposed to be about. (See above for an example.)Frankly I don't care what you call it. I call it setting the market free. Dana Blankenhorn dana@xxxxxxx editor www.voic.us ----- Original Message ----- From: "David Farber" <dave@xxxxxxxxxx> To: <ip@xxxxxxxxxxxxxx> Sent: Tuesday, June 20, 2006 12:59 PM Subject: [IP] Summary for Congress of proposed NN Act ProposalMime-Version: 1.0 Content-Transfer-Encoding: 8bitContent-Type: text/plain; charset=WINDOWS-1252; delsp=yes; format=flowedBegin forwarded message: From: Seth Johnson <seth.johnson@xxxxxxxxxxxxxxxxxxxxxxx> Date: June 20, 2006 12:29:19 PM EDT To: ecommerce@xxxxxxxxxxxxxxxxxxx, broadcast- discuss@xxxxxxxxxxxxxxxxxxx, A2K@xxxxxxxxxxxxxxxxxxx, upd- discuss@xxxxxxxxxxxxxxxxxxx, commons-law@xxxxxxxxx Subject: [Upd-discuss] Summary for Congress of Our NN Act Proposal John Mitchell has just produced a wonderful summary of our proposed legislative approach for Congressional staff. See below. Sethhttp://www.dpsproject.com/CongressSummary.htmlIntroduction and Summary for Congressional Staff (Click here for the proposed "Internet Platform for Innovation Act of 2006" [http://www.dpsproject.com/legislation.html]) Attached is a fresh approach to "network neutrality." It recognizes that the Internet is, in fact, neutral. Neither slick promotions offering "premium" or "exclusive" services, nor thoughtful legislation, can change that. Any service offered by one of the many networks that form a part of the "network of networks" called "the Internet" which favors the delivery of some data packets over others based on their content, source or destination, is simply not "the Internet." To pass off access to specially modified networks as "Internet access" is false and deceptive. In over thirty years of global standards and Internet service provider behavior, Internet participants have come to assume that their traffic will be passed without interference. Because the global "Internet Protocols" of the Internet are based on this concept, neutrality is inherent in it. So, when Congress seeks to preserve network neutrality, it need not do so by "regulating the Internet," as it would be difficult and unnecessary to legislate fundamental global protocols of Internet router behavior. Rather, it is far better to allow Internet-connected services and specially-tailored networks (even if perceived as more valuable to some) to compete freely in the marketplace, regulating those who would misrepresent them as "Internet" services or "Internet access." This has the critical advantage of not allowing the standards to be overridden by these custom modifications. Without standards, there is no competition or ability to connect between networks. For as long as we have had an Internet, we have also had "local access networks," or LAN's, typically operated within a single company. Today, major network access providers have the capability of offering very large LAN's, and even networks of LAN's, which may look a lot like the Internet to many unsuspecting consumers. If such LAN providers happen to be the only viable choice for Internet access, they will have the power, working with a few major corporations, to replace the Internet access for millions of Americans with access to a "walled garden" containing only such portion of the Internet as they allow, and in which only those companies willing and able to pay will be able to have access - or best access - to their subscribers. It may be the case that some consumers will prefer the more limited access being offered, but such offers must compete on their own merits, and not at the loss of an open, consistent, and predictable platform for the transport of innovative products and services by all. Conversely, if networks that treat applications specially wish to create a global network consistent with their practices, they can enter into appropriate processes and work to develop standards. Thus, this proposal recommends that Congress authorize the Federal Trade Commission to enforce a prohibition on false and deceptive representations pertaining to "Internet access" while leaving innovative networks free to develop their own proprietary services, so long as their nature is not misrepresented. This approach will enable consumers to make informed comparisons among the Internet access being offered as distinct from other products and services offered by their Internet access providers, while assuring that anyone who purchases true Internet access will get what they bargained for - access to the global Internet, unfettered communications throughout the globe, and access by myriad competitors, individuals, advocates, and news sources whose products, services and communications can be made available to them on a level playing field. * Introduction and Summary for Congressional Staff (http://www.dpsproject.com/CongressSummary.html) * Facing Reality on Net Neutrality (http://dpsproject.com/) * Two Types of Neutrality (http://www.dpsproject.com/twotypes.html) * Proposal: The Internet Platform for Innovation Act of 2006 (http://www.dpsproject.com/legislation.html) _______________________________________________ Upd-discuss mailing list Upd-discuss@xxxxxxxxxxxxxxxxxxx http://lists.essential.org/mailman/listinfo/upd-discuss ------------------------------------- You are subscribed as dana@xxxxxxxxxx To manage your subscription, go to http://v2.listbox.com/member/?listname=ipArchives at: http://www.interesting-people.org/archives/ interesting- people/-- No virus found in this incoming message. 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