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Net Neutrality Decoded
Betcher wondering why I haven't blogged about this issue yet. Well, it's because the articles about it -- pro and con -- were all pretty incomprehensible...until now. Andy Kessler detangles it all in The Weekly Standard, and proposes a solution. The solution's below, but read the whole piece at the link:

Start screaming like a madman and using four letter words--like K-E-L-O. And fancier words like "eminent domain." I know, I know. This sounds wrong. These are privately owned wires hanging on poles. But so what? The government-mandated owners have been neglecting them for years--we are left with slums in need of redevelopment. Horse-drawn trolleys ruled cities, too, but had to be destroyed to make way for progress. How do we rip the telco's trolley tracks out and enable something modern and real competition?

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.

Without even being paid by the hour, I read through the Supreme Court's Kelo v. City of New London eminent domain rulings. Surely there exists some clever Silicon Valley counsel to twist the wording of the precedent. The telcos may want to treat the Internet like a shopping mall that they own, but the premises are looking awfully sketchy. So start with this line: "Economic underdevelopment and stagnation are also threats to the public sufficient to make their removal cognizable as a public purpose."

Sure, property rights are important, but that doesn't mean we can't shake a cattle prod at our stagnant monopolists and say "update or get out of the way." The mantra should be "megabits to phones and gigabits to homes." We'll only get there via competition. Regulations--even regulations that look friendly to the Googles and Yahoos and hostile to the telcos--will just freeze us where we are today.

IN THE LONG RUN, technology doesn't sleep. You can't keep competitive King Kong in chains. But why wait a decade while lobbyists run interference? If Congress does nothing, we will probably end up paying more for a fast network optimized for Internet phone calls and video and shopping. But this may not be the only possible outcome. Maybe the incumbent network providers--the Verizons, Comcasts, AT&Ts--can be made to compete; threatening to seize their stagnating networks via eminent domain is just one creative idea to get them to do this. A truly competitive, non-neutral network could work, but only if we know its real economic value. If telcos or cable charge too much, someone should be in a position to steal the customer. Maybe then we'd see useful services and a better Internet. Sounds like capitalism.

What new things? It's not just more bandwidth and better Internet video--how about no more phone numbers, just a name and the service finds you? How about subscribing to a channel and being able to watch it when and where you want, on your TV, iPod, or laptop? How about a baby monitor you can view through your cell phone? Something worth paying for. And that's just the easy stuff.

We don't even know what new things are possible. Bandwidth is like putty in the hands of entrepreneurs--new regulations are cement. We don't want a town square or a dilapidated mall--we want a vibrant metropolis. Net neutrality is already the boring old status quo. But don't give in to the cable/telco status quo either. Far better to have competition, as long as it's real, than let Congress shape the coming communications chaos and creativity.

Here's what Lawrence Lessig calls "the dark other side of net neutrality," sneaky, sleazy telecom mergers. And "in case you weren't clear on how the telcos screwed everyone," click here for the long version. Or here, for the high points of "The $200 Billion Broadband Scandal."

While I pay $59 for my crappily maintained Comcast Internet, plus over $100 for two phones on Verizon, guess how much it costs in commieland. Here, from The Paris Blog, is the cost of a package deal in France of telephone service and high speed Internet:

The Boy and I have been having lots of fun over the last 72 hours. One of us (me) had the great idea to change our telephone/internet plan. Instead of paying God-knows-how-much for our phone, and then 35 euros/month for our internet, I suggested we mesh the two and sign up with Neuf Telecom. They have a deal: 29,90 euros/month for high-speed internet and UNLIMITED calls throughout France, Europe, the US, Canada, India and China. World powers, unite!

As almost all of my American friends only have cell phones, it costs me so much money to call anyone I love on the other side of the ocean. Neuf is the only company I know of that not only provides unlimited calls to the States, but also to CELL PHONES in the States.

Posted by aalkon at June 21, 2006 11:21 AM

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Net Neutrality explained another way:

Posted by: Deirdre B. at June 21, 2006 8:20 AM

Comparisons to communist or socialist countries are always straw. Left out of said comparisons is the enormous jump in taxes. That's part of the cost of the broadband in Europe, like it or not.

Comparing R&D from Intel to the wholesale replacement of extant TC systems is also straw. One is in the hopes of coming up with new sales for one-time purchase items, the other for on-going use of in-place service systems. The TC R&D goes into things like making the line so you can actually understand the other person, like it was when I was younger. Still on copper, no less.

"Economic underdevelopment and stagnation are also threats to the public sufficient to make their removal cognizable as a public purpose."

Isn't that pretty much the same line developers use to grab people's private homes so they can get a free leg-up from government to build a mall?

The general tone sounds very much like the one you get at -- "I want it free and I want it now."

Hard to get past the tone.

Posted by: Oligonicella at June 21, 2006 2:24 PM

Per Olligonicella, yes, broadband's much cheaper in France than in the US, when you ignore the vast amount you have to pay in taxes to keep all of that up. Like the 40% rate on salaries above $80K a year plus the additional 19.6% VAT. So you still pay for it, just not directly. I know that Germany is preparing to impose a computer tax, similar to the TV and radio taxes they already have. I think that trend will catch on quite well.

Plus, you can't compare cable internet to DSL. DSL is much cheaper than cable, with lower speeds. Verizon DSL costs anywhere from $15-30 a month.

I'm open to the net neutrality arguments because the telcos and cable companies were given a government sanctioned monopoly (and fight tooth and nail for legislation against all competitors) and therefore their grasp on "this is my property, I can do with it as I wish" is more tenuous than a homeowner's.

One thing I do like about it here in Germany is that the taxes are included in the prices, so if I have 25 euros of stuff, I know I'm paying 25 euros as opposed to figuring out the additional tax.

Posted by: Mo at June 22, 2006 12:35 AM

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