Title: Why Net Neutrality is a Bogus Issue
1Why Net Neutrality is a Bogus Issue
- Presentation for Fall VON 2006
- Boston MA September 13, 2006
- By Scott Cleland
- Chairman, NetCompetition.org
- An E-Forum Funded by Broadband Companies
- www.NetCompetition.org --- www.precursorblog.com
-
- and President, Precursor LLC
- An Industry Research and Consulting Firm
- www.precursor.com --- scleland_at_precursor.com
2Why Net Neutrality is a Bogus Issue
- No real problem
- The core net neutrality assertions are false
- Driven by special interests -- not principle
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3I. No Real Problem
- No consumer harm
- Prices falling choice and speed increasing
healthy deployment explosion of new products,
services and innovations - Free speech and Internet access already protected
- Hypothetical unsubstantiated allegations
- One documented U.S. example in last five years
- Small telco Madison River, blocked VoIP swiftly
punished by FCC - Net neutrality punishes 2000 companies for the
mistake of one - Jumped to worst case conclusion based on a few
press quotes - Existing laws more than sufficient
- FCC, FTC, DOJ have authority/mandate to protect
competition - FCC has replaced monopolies with competition over
11 years - FTC says no one has yet filed complaints or
explained problem
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4II. The Core Assertions are FalseA. The Net is
neutral shouldnt be tiered
- Reality the Net isnt neutral or un-tiered as
the buzzword Net Neutrality term insinuates - Net traffic is treated un-equally for variety of
reasons - Net backbone has long had 3 different peering
tiers - Net access pricing has long been tiered dialup,
free WiFi, and various price/speed tiers of
broadband - Net usage is unequal 5 users use 50 bandwidth
- Net legal treatment of technologies is very
different
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5II. All Core Assertions are FalseB. A
broadband duopoly requires regulation
- Broadband is young, fast-growing and dynamic
market thats replacing monopoly dialup service - What matters is the competitive trajectory for
choice/price/supply - The facts prove a competitive market
- Choice of broadband providers is expanding
rapidly per FCC - Satellite is the most widely available option,
not DSL/cable modem - Real bandwidth prices fallen 50 for DSL/cable
modems over last few years - Speed offered has doubled bundles/promotions
lower prices too - Supply of new broadband competitors is
increasing - Satellite broadband wireless broadband of
Verizon, Sprint, ATT T-Mobile WiFi hot spots
Clearwire WiMax Muni-WiFi - BPL is now a feasible future third wire into
home
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6II. All Core Assertions are FalseC. Net
Neutrality would maintain status quo
- Competition No Internet regulation is the
status quo! - Bipartisan Telecom Act 1996 replaced monopoly
with competition and de-regulation - Monopoly-era copper regulations like net
neutrality have been made obsolete by the
emergence of competition - All non-copper broadband technologies have never
had net neutrality regulation, e.g. - 30 million cable modem users
- 210 million wireless users
- Millions of WiFi users and
- The increasing of users of satellite broadband,
WiMax, or BPL. - Snowe-Dorgan/Markey bills do not restore/update
old law because current law says keep net free of
regulation - These bills would regulate the Internet for the
first time
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7II. All Core Assertions are FalseD. Net
Neutrality is gaining momentum
- The official actions that matter show clear
momentum against net neutrality - In May, the House defeated Markey Bill 269-152
- In June, FCC refused neutrality conditions on
Adelphia merger - In July, Senate Commerce Committee defeated
Snowe-Dorgan 11-11 and passed Stevens Net
neutrality compromise 15-7 - In August, FTC Chairman stated FTC is skeptical
saying no one has complained to them or explained
the supposed problem. - SavetheInternets touted momentum measures are
bogus e-petition signers, coalition members
blogposts they are - Local stunts designed to get media attention and
- Activist and operative staged, not real
spontaneous grass-roots.
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8III. Driven by Special Interests Not Principle
- Net Neutrality isnt about consumers, principle,
or policy its about money - Political fundraising for Moveon.org and the
mid-term elections - Commercial negotiating leverage for online giants
to protect their profits by shifting new video
distribution costs fully to consumers. - A cynical few have shamelessly scared the many
with outrageous and unsubstantiated
fear-mongering -- for monetary/political gain - SavetheInternet.org Moveon.orgs front group
knows - Theres no better way to energize bloggers/online
activists than scaring them that bad guys want
to take away their Internet! - ItsOurNet.org the front group for Google, eBay,
Amazon, Microsoft, Yahoo are scaring many with
unsubstantiated claims - Small businesseses may not be able to survive,
online etc. - They know it doesnt matter if its true, only if
they can get enough people to fear that it may be
true
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9III. Evidence Highlights Special Interests
- Moveon.org and the online giants are not
- Looking out for the little guy its really
reverse Robin Hood - Net neutrality is average pricing where the
masses, who use the least bandwidth are forced to
subsidize the few bandwidth hogs and dotcom
billionaires. - Protecting free speech or the First Amendment
- The words free speech and First Amendment are
nowhere to be found in the Senate Snowe-Dorgan
bill or the House Markey bill. - They oppose strong free speech protection
language in the pending Stevens Bill - Markey bill has a provision, which is effectively
guilty until proven innocent - Protecting consumers
- After screaming Congress should not leave
consumers unprotected, ItsOurNet and
SavetheInternet both oppose the only pending
legislation with a chance of passage that would
codify more consumer protections than exist now - Supporting competition or consumer
choiceSnowe-Dorgan Markey Bills - Would regulate for first time free services, new
entrants and individual persons - Those bills have no sunset provisions for when
competition may replace the need for regulation
the assumption is competition can never work
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10Conclusion Net Neutrality is a Bogus Policy
Issue
- FCC Chairman Kevin J. Martin
- "If you offer different tiers of speeds, a
consumer chooses the lowest tier, and he wants to
access content that would require higher speeds
than he has purchased, hes not being blocked
from access. He just hasnt purchased the speed
thats necessary." - FTC Chairman Deborah Majoras
- let me be clear that if broadband providers
engage in anti-competitive conduct, we will not
hesitate to act using our existing authority. But
I have to say, thus far proponents of net
neutrality regulation have not come to us to
explain where the market is failing or what
anti-competitive conduct we should challenge we
are open to hearing from them.
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11- Chairman Scott Cleland
- NetCompetition.org
- An E-Forum Funded by Broadband Companies
- Supporting evidence for this
- presentation can be found at
- www.NetCompetition.org
- www.precursorblog.com
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