In What's Driving the Next Telecom Law, David Isenberg writes about the incumbents desire to preserve "Rational Competition"... Rational competition is the idea that corporations, knowing their own costs, and their competition's pricing, will price their products to maximize profits. It is tied up in the language of predatory pricing. Some economists argue that predatory pricing is rare, because it is, in fact, irrational... The flaw in the incumbent's argument is twofold... more
Susan Crawford, seeking to learn from Korea and Japan, identifies three routes towards broadband competition... Facilities based competition: Still waiting for that mythical third wire, or perhaps some unused, unlicensed TV spectrum, but not holding my breath. (Broadband over powerline? It is such an encumbered technology that it is its own barrier to entry.) Wholesale access: Been there, tried that, but the Bells wouldn't unbundled elements... more
The primary reason that Japan and Korea do so much better than the U.S. on any measurement of broadband (availability, penetration, price, speed) is that there is fierce competition in the market for broadband internet access in these countries. ...How do you increase competition in the U.S. for broadband access? Right now, we have giants fighting with each other -- cable and telephone companies. Small numbers of these companies control 80%-90% of the market for broadband access... more
With everyone talking about network neutrality, with all the heat, it didn't feel good to have to be in NY today and miss the goings-on in Washington. I watched part of the late afternoon markup session online, with Rep. Barton sounding awfully effective as he marched steadily through Title III -- quickly taking votes, soothing congress people who were suggesting soon-to-be-rejected amendments, and sounding confident. The only substantive work I heard was the rejection of an amendment that would have left in place all state laws that regulate the subjects of the bill -- like mini wireless networks. But the real news had already happened... more
Just a year ago, I gave a talk at David Isenberg's 2005 Freedom to Connect conference. I said, essentially, that we should be careful in asking for regulation to protect the net, because the power to protect carries with it the power to constrain. This was a very troubling message for the audience, and the chatroom projected behind me went wild with disapproval. Since then, I've become very concerned about the concentration in broadband service provision in this country, and worried that there won't be any competition for unfettered internet access. more
Just got this email reporting the speech made by former FCC Chairman @ F2C organized by David Isenberg. "Former FCC chairman Michael Powell is up on the stage at the Freedom to Connect conference right now, and he warns the tech elite crowd here not to be naive about the dangers of asking Congress for legislation on Net Neutrality. As he explains..." more
The Telecommunications Policy Review Panel report [Canada] was released yesterday and while the immediate reaction will no doubt focus on the recommendations for a market-oriented approach with significant changes to the CRTC, I would call attention to three other recommendations gleaned from reading the executive summary (the full document is nearly 400 pages). more
Is the United States in full retreat from internationally recognized regulatory best practice? Or is it instead headed toward some different destination -- "dancing to the beat of a different drummer"? Where is this likely to lead? The following is an introduction to a paper, published by IDATE, from J. Scott Marcus, a Senior Consultant for WIK-Consult GmbH: "...What has radically changed is telecoms regulatory practice in the United States. The U.S., in a long series of regulatory decisions, has largely abandoned its long-standing regulatory principles and moved in an entirely new direction." more
Ahh, so the telecom incumbents have come up with a "new" idea for the Internet -- usage-based pricing. That's right, more usage (for things like VOIP and video especially) means more costs to operate the network, so users should pay by the bit, or some similar metric. It's all so logical! But wait a minute. I thought what sparked the consumer Internet revolution was the fact that ISPs didn't charge by the minute, but offered flat-rate monthly fees. And what catalyzed the boom in cellular usage here in the US was the shift from heavily usage-based pricing to the largely flat rates we see today... more
Despite rather rapid growth in broadband access, the U.S. is falling further and further behind other countries -- we're now ranked #16 in the world. What's slowing the U.S. down? Two threads dominate U.S. broadband policy debate today. The first focuses on traditional telecom regulation -- reciprocal compensation, universal service, e911, and CALEA (wiretap capabilities). The second focuses on "Internet freedoms," i.e., guarantees that your broadband access provider won't block or inhibit specific applications like VoIP. more
A World-Renowned Source for Internet Developments. Serving Since 2002.