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September 06, 2007
Questionable Advice On Net Neutrality
The DOJ Antitrust Division's just-released public comment on net neutrality (available here) has been getting a lot of press. Unfortunately, it appears that the shoddy analysis that Jack Goldsmith saw in the DOJ's torture memos may also be infecting its approach to net neutrality. I just want to raise three worries apparent on a quick read of the document:
1) Pollyanna Prevails: The DOJ document presumes that a laissez-faire approach has done wonders for US broadband access. But just as visitors from Japan and Europe find our cell phones crippled, so too our internet access is lagging. As the WaPo notes, "In sharp contrast to the Bush administration over the same time period, regulators [in Japan] compelled big phone companies to open up wires to upstart Internet providers"--and saw extraordinary results. But (again, on a quick read), I did not see a single reference in the DOJ document on how other countries handle the policy issues the FCC is facing, except for the Canadian Telus dispute (which it called "irrelevant").
2) Shunning the Scholars: From a quick text-search of the document's footnotes, it appears that DOJ fails to reckon with the work of a single one of the following prominent pro-net-neutrality scholars: van Schewick, Economides, Frischmann & Waller, Crawford, or Wu.
van Schewick's work provides an interesting contrast to many of the citations in the DOJ filing:
Barbara van Schewick [argues that there is a] severe threat of discrimination without network neutrality regulation, and that discrimination will reduce application-level innovation. van Schewick's work is not funded by any of the special interests involved in this issue -- nor is it sponsored by the "independent" think tanks that are funded by the special interests involved in this issue.
Even more surprisingly, the DOJ fails to cite the leading legal academic voice against net neutrality, Christopher Yoo.
3) Errant Economism: Economic analysis has its place, and DOJ does cite several economists who claim that network neutrality rules would "skew investment, delay innovation, and diminish consumer welfare." Even if I were to cede that very questionable claim, is that the end of the issue? Economic analysis is one tool among many for evaluating the normative desirability of a policy proposal. Would the DOJ think FCC Commissioner Deborah Taylor Tate out of line for being concerned about sex and violence as she helps craft these rules? A narrow focus on economics does not help us achieve what the DOJ itself admits is the clear "public policy objective here. . . .: a thriving and dynamic Internet capable of meeting the demands of consumers for fast and reliable access to a rich variety of content and applications."
Posted by Frank Pasquale at September 6, 2007 10:35 PM
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Comments
This is very much par for the course for all interested agencies in this domain. The FCC, FTC and DOJ have turned a blind eye to the broadband telecoms market, and with Twombly now in the annals of the SCOTUS, private antitrust enforcement has been virtually 100% foreclosed.
Net Neutrality is an artificial idea which only occurs in the absence of true competition. While I respect the opinions of the economists and legal experts, it does not require their input to see that there's a real fundamental problem in the United States broadband market.
And Deborah Tate? To be pedantic, give me a break. She continues to say their is, and I quote, "fierce competition" in the broadband market. Has she read the statistics published by her own FCC agency? Wireless and Wireline is some 95%+ owned by cable and telephone incumbents. She recklessly cites vapor technologies such as broadband over powerline (BPL) and WiMax as serious competitors. BPL has less than 10,000 connections in the US (compared to some x million other high speed connections) and WiMax has barely made it off the drawing board (see San Fran. public Wifi cancelled just this past week).
Conversely, the FTC does have a report from June of this year which does address discrepancies between the European/Asian markets and the US. However, this report gives rather hollow and unsupported bases for why these gaps arose (e.g. geographic, etc.).
Posted by: Jack S. at September 7, 2007 06:54 AM
It's my understanding that a company which wants guaranteed speed and capacity can already buy it/ You have some problems with the many-to-one access needed by companies such as Google, but nobody gives them a connection to the internet.
My guess is that the companies who sell connections to the rest of us have made assumptions that have been wrecked by P2P networks and streaming video. They didn't expect us to use the bandwidth they sold us. Here in the UK, the phone company has given them a chance to increase prices, by deploying new technology. What might be the selling point in the USA, because nobody here would dare increase prices without some benefit they could point to?
Posted by: Dave Bell at September 9, 2007 12:57 PM
