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March 17, 2006

Net Neutrality Advocates Finally Start Mobilizing

networkaccess.jpgAfter a fumbling kick-off, net neutrality advocates are finally getting into position, with a noticeable ramp-up in political organizing. First, CNET’s Anne Broache has this item about how the AARP is weighing in on the pro-net neutrality side of the debate.

The group that represents older Americans is not, at first blush, a prime constituency for this issue. Still, the AARP believes it has a stake in keeping the Internet open and free of potential broadband provider interference.

“We’re not traditionally someone who would be involved in technology legislation and things of that nature, but this has a direct impact on our members and their lifestyles,” said AARP spokesman Mark Kitchens.

The AARP may not be a logical water-carrier, but it is part of a clearly organized coalition of seventy companies, organizations and interest groups that sent a letter to the Senate Commerce committee yesterday advocating the inclusion of net neutrality provisions in upcoming telecom reform legislation (something that Committee Co-Chairman Ted Stevens (R-AK) seems reluctant to do).

In the letter, signed by a wide range of companies, including Adobe, Amazon, EarthLink, Google, Travelocity, Yahoo and Skype, and a broad array of organizations, including the Consumer Electronics Association, Public Knowledge, Consumer Federation of America and the American Associatin of Libraries, the coalition argued for net neutrality measures.

While it is appropriate for Congress to develop new legislation to promote competition among broadband networks, it must also ensure that consumers and providers continue to have the right to use those networks to send and receive content, and to use applications and services, without interference by network operators. As Internet pioneer Vint Cerf said, the Internet is, and must remain, “innovation without permission.”

Someone, or some group of companies, on the pro-net neutrality side of this issue has gotten wise to the ways of Washington — this kind of coalition-building, however hokey, is quite effective — and is clearly willing to spend some cash to more effectively lobby Congress. The organizer of the coalition is strategic communications and grassroots company Qorvis Communications, which is closely aligned with DC lobbying powerhouse Patton Boggs.

Posted by Cynthia Brumfield at 11:37 PM | Print | Comments (3)

March 17, 2006

Spam, Access Bottlenecks & the Invisible Hand

Esther Dyson makes some good points about emerging email services intended to address the spam problem by charging senders a fee for guaranteed delivery of emails. Though her opinion piece in the New York Times focuses mainly on a company called Goodmail Systems, which she says is proposing “a sort of FedEx for e-mail,” it also addresses broader issues about this type of approach to the spam problem.

Dyson’s piece also reminded me of the interactions between different layers of the Internet and how a lack of competition at the access layer could eventually put at risk the competitive innovation she convincingly argues can best address “market failures” at the application and service layer.

There’s no question that we need to try some new approaches to e-mail. The current situation—where the Internet is ridden with spam, most mail is unwanted and some is objectively dangerous—illustrates a market failure.
Spam filters are imperfect, partly because the senders of “bad” mail are getting better and better at defeating them. And those who take advantage of the Internet aren’t paying for the costs of their abuse. Instead, the recipients’ Internet service providers are paying the cost of spam filtering, and recipients are paying when legitimate messages get caught in those spam filters.
What shocks me most about the opposition to Goodmail is that people who claim to believe in the free and open Internet, with its welcome attitude to innovation, want to shut down an idea. That’s wrong.

AOL has plans to offer a service using Goodmail, a move that was decried as an “email-tax” by more than 50 groups, many of them non-profits:

AOL’s “email tax” is the first step down a slippery slope that will harm the Internet itself…On a free and open Internet, small ideas can become big ideas overnight. As Internet advocacy groups, charities, non-profits, businesses, civic organizing groups, and email experts, we ask you to reconsider your pay-to-send proposal and to keep the Internet free.
A pay-to-send system won’t help the fight against spam - in fact, this plan assumes that spam will continue and that mass mailers will be willing to pay to have their emails bypass spam filters. And non-paying spammers will not reduce the amount of mail they throw at your filters simply because others pay to evade them.
Perversely, the new two-tiered system AOL proposes would actually reward AOL financially for failing to maintain its email service. The chief advantage of paying to send CertifiedEmail is that it can bypass AOL’s spam filters. Non-paying customers are being asked to trust that after paid mail goes into effect, AOL will properly maintain its spam filters so only unwanted mail gets thrown away.

Dyson disagrees:

Senders should bear the costs of sending mail, and it should be the senders’ duty to figure out whether each piece of mail is wanted. Ultimately, I believe, Goodmail or its successors will develop a mechanism to rebate some of the fees to the senders whose mail is wanted. That’s why I don’t worry about individuals and nonprofits being squeezed out.
In the short run, AOL and others will serve as the recipients’ proxies. If they don’t do a good job of ensuring that customers get the mail they want, even from nonpaying senders, they will lose their customers. And in the long run, recipients will be able to use services like Goodmail to set their own prices for receiving mail.
In my case, I’d have a list. I’d charge nothing for people I know, 50 cents for anyone new (though if I add the sender to my list after reading the mail, I’ll cancel the 50 cents) and $3 for random advertisers. Ex-boyfriends pay $10.

One of the things that struck me about Dyson’s argument is that it’s dependent on healthy market forces being brought to bear on the problem. It speaks to a fundamental virtue of the Internet at the application and service layers—that it’s awash with competitive innovation. In that key respect, the spam problem appears to be fundamentally different than the one driving the net neutrality debate. In the latter case, it is the lack of vibrant competition at the local-access level that makes market solutions very questionable.

Where there’s not enough competition, the “invisible hand” Dyson puts her faith in cannot work. In fact, one of the dangers of relying on a vertically-integrated duopoly Internet access market is that pipe-owners’ market power will migrate up the stack into application and service markets, squeezing out the competition-driven innovation that can efficiently develop the kind of flexible, user-driven e-mail service Dyson eloquently envisions—along with many other valuable innovations that can efficiently address demand in an economy built on the foundation of an open Internet.

Do we really want to risk sticking the monkey-wrench of excess market power into the gears of the Internet’s hyper-competitive and hyper-efficient market machinery—a machinery that arguably works better than any other yet conceived to maximize the value created by Adam Smith’s “invisible hand?”

There are already signs that the market-power monkey wrench is beginning to prod and poke around the Internet’s mechanisms, looking for highly leveragable points of control.

Policymakers in Washington have it relatively easy this time. They don’t have to pick winners and losers, or revamp the hopelessly complex and inefficient regulatorium that’s been created around the telecom and media industries. What they should focus on instead is a simpler question, though one that takes some vision and courage to address (and I’d like to believe there’s still some of both in Washington)—the question of which policies can most reliably facilitate the migration of everything we know as telecom and media to the open Internet.

To do that, policymakers—and the rest of us interested parties—need to step back from the cable-telco franchising debate, and even the details of the net neutrality debate, and recognize that the best way to realize the dream of a free, open and vibrant market economy (and one that can help us solve many of our social and political problems) is to invest as a society in an ultra-high capacity, ubiquitous, open-access Internet…one that would make Adam Smith proud.

When I have more time I’ll be discussing some proposed approaches to achieving this goal that are making increasing sense to me as I consider the alternatives.

Posted by Mitch Shapiro at 8:38 PM | Print | Comments (0)

Internet Writer Jailed for 10 Years in China

freespeech.jpgDespite hopes that the Chinese government may be softening its hard-line stance against free speech on the Internet, a Chinese teacher who posted a document entitled “The Road to Democracy” has been sentenced to ten years in jail for writing “subversive” essays.

Junior high teacher Ren Ziyuan was found guilty of “subversion of state power” for writing the essay and for planning to form a political group. The comforting news in all this: Chinese prosecutors presented no evidence from a U.S. Internet company at the trial.

Posted by Cynthia Brumfield at 2:08 PM | Print | Comments (0)

Google Bolsters DC Influence

Google is taking steps to bolster its influence in the nation’s capital. According to this piece in the San Francisco Chronicle, the Mountain View-based giant has hired the son of former Speaker of the House Dennis Hastert (R-IL) to advance its causes in Washington.

Google has hired Joshua Hastert, who works for the well-connected lobbying firm PodestaMattoon. According to the article, Google paid the firm $40,000 during the second half of 2005, a sum that presumably went to aiding Google in its efforts to gain net neutrality regulations and defend the search leader on its intellectual property and censorship battles.

Posted by Cynthia Brumfield at 9:41 AM | Print | Comments (0)

Telecom Turf Battle Brewing Between House Committees

telecomactrewrite.jpgNational Journal’s David Hatch has this item about a telecom turf battle brewing in the House which has all the earmarks of a push by net neutrality advocates to gain some leverage in their faltering efforts to influence telecom reform legislation. The House Judiciary Committee headed by Rep. James Sensenbrenner (R-WI), a telco critic, plans to hold hearings this spring on communications policy, pitting Judiciary against the House Energy and Commerce Committee, which is moving ahead with its own telecom bill.

The efforts by the Judiciary Committee are focused on antitrust and industry consolidation (the committee has also formed a task force on telecom and antitrust) and, according to Hatch’s piece, could likely include net neutrality provisions favored by Internet companies such as Yahoo, Google and Amazon.

Posted by Cynthia Brumfield at 8:12 AM | Print | Comments (0)