Forget Net Neutrality: Just Take The Networks Away From The Telcos

from the root-for-no-one dept

Slowly, but surely, people are starting to figure out what's really going on with the network neutrality debate. While some of us have been trying to point out that the network neutrality debate is only clouding the real issue concerning competition in the broadband space, too many people have been focused on which side of the ridiculous debate you're on. However, both the telcos and the internet companies have been feeding the public exaggerated propaganda that continues to obscure the real issue. Hopefully the tide is turning. Last week, Tom Evslin wrote up a great summary of the situation, pointing out why both sides were lying and how competition was the issue. Now, Andy Kessler has matched him with a fun opinion piece for the Weekly Standard explaining why you should root for no one in the net neutrality debates. He points out that the telcos have to push against net neutrality, because otherwise their business model collapses -- an argument he made a few years ago when it came to line sharing (the lack of which has obliterated what little competition there was in the broadband space). Kessler goes on to knock down the telco supporters' favorite argument about how they'll never invest in new fiber without a guarantee of a profitable business model:
"Forget the argument that telcos need to be guaranteed a return on investment or they won't upgrade our bandwidth. No one guarantees Intel a return before they spend billions in R&D on their next Pentium chip to beat their competitors at AMD. No one guarantees Cisco a return on their investment before they deploy their next router to beat Juniper. In real, competitive markets, the market provides access to capital.
So, what's the solution? Kessler comes up with a modest proposal of sorts, that is amusing to read, but which will never play in Silicon Valley with its libertarian focus on "property rights." He suggests yanking language out of the Supreme Court Kelo "eminent domain" case -- and using that to argue for taking over broadband networks from the telcos (a situation for which there is some evidence that better broadband can be delivered). His point, satirically enough, is that if the threats are made loudly enough, it could freak out the telcos just enough to generate some real competition in new networks. Instead, though, we're left with arguing about silly side arguments backed up by musicians who have no clue what they're talking about. Suddenly, arguing for eminent domain over telco networks doesn't seem quite so silly...

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  1. identicon
    mark, 19 Jun 2006 @ 5:16am

    That's plain stupidity

    To your credit you discount this idea, well almost, up until the last line. Public roadways and informaiton highway are not similair other than some time ago the "highway" anaology stuck.

    I have brought this up before but have yet to see any response, Net Neutrality in the current form being debated would eliminate a service providers ability to enter into an SLA which could l have a great impact on the business economy. For example, when a service provider signs up a 10 facility auto dealership they sign an SLA ensuring a certian quality and uptime between the delaerships. To do this the service provider must provide priorization for certain data on the network.

    VOIP is another example of prioritzation of packets. How many consumers are willing to give up quality voice service so that 5 year olds across america can play on nickjr.com with quality bandwidth? Nothing of course against 5 year olds or Nick Jr.

    And finally why should the internet be any different than anything else in America? Do all comapnies get the front cover advertising page? Doesn't Netflix have a competitive advantage by locating DC's near a post office and (I believe) paying some sort of fee to get priority services in return for only using the USPS? Why is this any differernt than soemone paying for prime delivery over a broadband pipe?

    I think the big issue that is totally missing from the debate is the fallicy that "everyone business can be equal on the web" which started in the 90's to get companies to open websites. I mean think about it, can a small bookstore really compare with Amazon? Of course not. Why? Well lots of reasons bur for one because Amazon can spend far more money (which means take far bigger risks) than others on advertising, search engine placement, etc.... What I cant understand is why premium placement of an ad is any different than premium delivery of a service?

    And finally "Forget the argument that telcos need to be guaranteed a return on investment or they won't upgrade our bandwidth. No one guarantees Intel a return before they spend billions in R&D on their next Pentium chip to beat their competitors at AMD. No one guarantees Cisco a return on their investment before they deploy their next router to beat Juniper. In real, competitive markets, the market provides access to capital.

    True but in the examples given for the most part none of these companies need to worry about the gov't taking steps to completely turn their business models upside down. Can anyone imagine the outcry if Intel designed a chip that is so far beyond anything available today and than the gov't steps in and says "You cant only sell that in high end machines at 2k plus since that would mena the masses could not affort it. Instead you must sell it at a lower price." The entire investmetnt market would dry up in a hearbeat and the stock market would crash. How is the net neutrality debate which at its core is focussed on "best effort vs prioritized packets" any different?

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