[IP] more on Two notes on Network Neutrality
Begin forwarded message:
From: Gerry Faulhaber <gerry-faulhaber@xxxxxxxxx>
Date: November 1, 2006 9:36:37 AM EST
To: dave@xxxxxxxxxx
Subject: Re: [IP] more on Two notes on Network Neutrality
[for IP]
Actually, slow-rolling DSL to DLECs is a particularly apt analogy.
The FCC required the resale of DSL at regulated rates. However, the
complexity of the relationship between ILECs and reselling DLECs
demanded a level of monitoring that was far beyond the ability of any
regulatory agency to enforce compliance, and as a result the ILECs
could forestall something they didn't want: mandated direct
competitors. There is a growing consensus that the mandated resale
of both DSL and wireline has been a failure: we gave the FCC a
virtually impossible job to do. Not that they didn't try, but the
Telecom Act of 96 was virtually unimplementable (I wrote a paper
about this a few years ago: "Policy Induced Competition: the
Telecommunications Experiments," in Information Economics and Policy,
at http://rider.wharton.upenn.edu/~faulhabe/732/Policy-Induced%
20Competition.pdf) . If we enact network neutrality legislation/
regulation, the complexity of enforcement (due to complexity of
monitoring) will again be far from the capabilities of any regulatory
agency, and for exactly the same reasons that mandated resale of DSL
lines didn't work. So we get a raft of new regulations (in the name
of competition) that will also not work; what a great idea!
Net neutrality is a different story; with the exception of wireline
telephone/VoIP, the BB ISPs are not really in the applications
provider business, so they have no direct competitors (again, save
VoIP). Their profit optimal strategy is to maximize the value that
customers get from their service, the better to raise prices. You
don't get people to pay you more by giving them worse service; you
get more $$$ by providing a better service. Does this mean we don't
have to watch the telcos/cable guys like a hawk in the VoIP space?
Of course not. But the proper tool to protect against
anticompetitive actions is not regulation (the DLEC case proves
that's a loser; why do we want to do it again?) but antitrust, and in
particular private antitrust suits. If you've got a beef as an
applicaton provider against an ISP, well, take 'em to court. It is,
after all, the American Way. Since we already have antitrust laws to
protect against anticompetitive behavior, we don't need a whole bunch
of new regulations (that won't work) to solve this problem. Use the
tools we have; if you think your blood is on the floor because of
anticompetitive conduct by an ISP, then prove it in court, based on
the facts.
And I repeat the challenge: other than Madison River, show me
anticompetitive conduct by the BB ISPs that would be fixed by NN
regulation.
Professor Gerald Faulhaber
----- Original Message ----- From: "David Farber" <dave@xxxxxxxxxx>
To: <ip@xxxxxxxxxxxxxx>
Sent: Wednesday, November 01, 2006 8:42 AM
Subject: [IP] more on Two notes on Network Neutrality
Begin forwarded message:
From: "Mike O'Dell" <mo@xxxxxxx>
Date: October 31, 2006 11:31:35 PM EST
To: dave@xxxxxxxxxx
Subject: Re: [IP] Two notes on Network Neutrality
David Farber wrote:
A note from Lauren and a note from Faulhaber (a co-author of a
memo with me and others)
Lauren may be ranting, but that doesn't make him wrong.
the DSL CLECs were methodically slow-rolled out of existence
by aggressive predatory tactics by the RBOCs. we saw that
first-hand every day trying to install and support DSL customers.
for someone to suggest that the broadband service business is just
peachy,
and that industry-destroying anti-competitive behavior in the space
hasn't happened
before and is unlikely to happen again, especially given its
unchallenged
success at eliminating competition, is patently absurd.
-mo
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