Vint Cerf’s comments offering the British model to the US are actually quite odd, as Britain is moving in a direction that’s more US-like, where the next-generation fiber infrastructure will be funded by services. The general idea is that British Telecom can pay for new infrastructure with services and very high wholesale prices for some period of time, and only after that will the wholesale price resemble operational cost. See this article on comments by the head of Ofcom, Britain’s FCC:

The boss of Ofcom has given the clearest indication yet that regulators are ready to offer BT more control over a next generation UK broadband infrastructure in exchange for investment.

In a speech in London at IT bigwig yacking shop Intellect yesterday, Ed Richards sympathised that “operators” who might invest in new infrastructure (read: BT) need to know that watchdogs will let them “make and keep” a rate of return on the investment.

That will likely mean allowing BT to operate a fibre network at a big competitive advantage, via high wholesale charges to other broadband providers who want to use the lines.

It’s very unlikely that Ofcom would let BT run a national fibre network as a traditonal incumbent monopoly. German regulators have tried the same trick to tease more investment in fibre from Deutsche Telekom, and are facing court action from the European Commission as a result.

Richards said: “They [investors in fibre] need a time horizon that gives them a degree of assurance for a realistic period in the future; that they know for example that the regulator will not suddenly change the rules of the game to reduce the returns just as the rewards for the risk start to flow in.”

I always laugh when Google complains about “monopolies”. There is exactly one monopoly in the Internet economy, and its name is Google

Gordon’s absolutely right - this badly needed saying and it’s great that Vint said it so well, even if off guard.

Verizon recently said that its cost of passing a home with FIOS fiber was generously less than $1000. What other home utility - water, sewer, electricity - comes at such a bargain?  Richard Bennett suggests a “risk” reward for investors.  What risk?  Bill St. Arnaud mentioned the other day a Canadian initiative to allow consumers to pay the capital cost of their last mile connection and cut through all the duopoly baloney.  Millions of us would do this in a minute if there was a bona fide offer.

It’s not clear that the American public harbors a secret, burning desire for hundreds of megabits per second of Internet access bandwidth. Surveys has consistently shown that demand for the highest tiers of bandwidth is modest, so the risk for infrastructure builders is a simple lack of subscribers to pay for the cable plant.

Cerf is displaying an amazing propensity for making rash statements that the Google PR staff have to sanitize. His most previous gaffe, delivered at the Personal Democracy Forum, was an apparent demand for government ownership of first mile networks, and now we have this. I can’t wait for the next, because each is more amusing than the last.

Two years ago, I wrote an article on the same topic (also on CircleID):

“It is conceivable that this is one of the most important debates as it will change the settlement system on the Internet. In a both-party-pay system, we will have a tariff, where Verizon will charge Google for accessing Verizon’s network but Google could also charge Verizon for allowing Verizon customers to use its services. This would have cascading effect in all other interdependent services on the Internet (even outside US).”

“even outside US” is what I like to say here because it is often overlooked. US policy has a cascading effect.

In the late 90s when Internet is taking off, developing countries were complaining how they got a bad deal off the settlement in Internet traffic. Unlike voice tariff where they are paid what they wanted, the Internet flip it and they end up paying full lease circuit as well as transit to US.

Many were extremely upset at the disappearing cashcow. Some smaller countries GDP literally is supported by revenue from AT&T;. “It cost me X dollars to build that last mile in our countries” they cried. But of course, thats not how the economics of Internet work back then.

You will see the similarity of the arguments of these developing countries on their last miles like how the incumbent argued about the need to protect their risk-reward in the last miles.

“Hopefully one of them would ask if it is in the interest of United State if Google and the likes-of-Google have to pay Verizon and all the likes-of-Verizon in the world.”

And if that were to happened, I think US stand to lose a lot more than what Verizon were to gain the short run.

I don’t recall the statement by the Verizon SVP, but in context it probably had a different meaning than you attribute to it. If you have a link to the actual story, I’d like to see it, as even Whiteacre’s comment about Vonage and Google makes more sens when you see that he was talking about VoIP service that didn’t have to follow the same rules re: 911 and other services as PSTN telephony, and wasn’t paying its fair share of interconnect fees.

The nationwide video franchising bill, HR 5252, didn’t have anything to do with the Internet, other than making the Four Freedoms binding. It was seized on by Google’s front groups because it was a convenient vehicle for making the advantage enjoyed by Google’s private CDN insurmountable. NN is simply a mechanism for preserving CDN privilege.

The video franchising concept provides Americans with an alternative to cable companies, and it has passed in all the states where it has been introduced, most notably California and New York.

And yes, Google has a monopoly on search advertising, the most lucrative and meaningful monopoly in the entire Internet economy.

Professor Google, Larry Lessig, has been promoting a more regulated Internet since 1999, James, the debate didn’t just start in 2006. What happened then was Google paid to have the issue become a hot political topic as opposed to private concern of a few ivory-tower academics at Google-funded programs like the Berkman Center and the program Lssig co-founded at Stanford on Google’s dime.

Prof Larry Lessig is known for his work on Creative Commons. Have you read his books?

Berkman Center existed long before Google did. Prof Charles Nesson attention is on “online poker” (check “Global Poker Strategic Thinking Society”) and if you don’t know what that has to do with “net regulation” and why he is doing that, then you have no idea whats going on that front*. Prof Jonathan Zittrain is the last person on earth you can accuse of being against an “open platform”.

Anyway, these people and groups are respected members of the community who has done more to ensure the Internet Freedom. As I said, you are entitled to your opinions but not everyone shares that.

* That is another interesting topic on soft money and lobbying, something to blog about in future about the conversation I had with Prof Nesson last year.

And also yes, I’ve read several of Lessig’s books and find them generally appalling. His grasp of networking technology is weak, and his attempt to extract principles of network design and impose them on human societies is scurrilous. I regard Lessig as America’s greatest living charlatan.

But you’re entitled to your own opinions, so we’ll just have to agree to disagree.