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Subject: [IP] more on Summary for Congress of proposed NN Act Proposal

  • From: David Farber <>
  • To:
  • Date: Thu, 22 Jun 2006 09:16:52 -0400

Begin forwarded message:

From: Bob Frankston <>
Date: June 21, 2006 8:21:16 PM EDT
Cc: &quot;'Dana Blankenhorn'&quot; <>, Gerry Faulhaber <gerry->
Subject: RE: [IP] more on Summary for Congress of proposed NN Act Proposal

The reason we don&#x2019;t have facilities competition is that there really isn&#x2019;t a separate business in facilities competition any more than there is a business in competitive electric distribution. Mandated pole access is a good idea but I expect it will quickly lead to viewing the bit paths as simple infrastructure.

The reason we don&#x2019;t ask for competitive electric distribution is that we don&#x2019;t buy light, we buy electricity. At first people did buy light and you still some buildings labeled &#x201C;Municipal Light Company&#x201D; or something like that.

As long as we frame the debate in terms of services and fund the infrastructure by selling services we have a problem. You can&#x2019;t fund the transport if users create services themselves and you can&#x2019;t sell bits at a price that covers the cost of the infrastructure unless you limit the supply because the bits have no value until they are turned into a service outside the network.

As I note in the value of the term &#x201C;network neutrality&#x201D; is in giving voice to the sense that the carriers are not playing fair if they do something like block VoIP or try to get a cut of the users&#x2019; value. I do worry about being too specific since what is important is the marketplace dynamic not the particular implementation of the current Internet. We don&#x2019;t even have to require global addresses because, as Skype has shown, we can program around such things.

If we look back at what happened when we were able to own our own phones and then later the phone wires in our homes we can see that people do indeed pay for infrastructure when they understand the value. There is no reason that doesn&#x2019;t extend to community infrastructure be it roads, sewers or bit paths.

Even better when the cost is reduced because we have a shared infrastructure rather than having each service provider have to build a separate infrastructure and then watch all the value disappear as others use the transport but create new services outside the network. The carriers should indeed be angry but the solution is not to prevent competition &#x2013; the carriers should be asking themselves why they have to pay for the infrastructure. They should be the first advocate community ownership.

Of course the carriers see control of the infrastructure as giving them an advantage in the marketplace but the FTC should be asking hard questions about such tie-ins. The carriers may also believe that they need control because they still think in terms of scarcity and can&#x2019;t imagine that a community would deploy enough capacity even as they leave many gigabits of copper fallow by carrying only an occasional phone call per pair.

The carriers&#x2019; plight is deeper as new services aren&#x2019;t using their infrastructure anyway &#x2013; the studios (AKA, TV broadcasters) are already assuming a download and peer model for distribution since only a small amount of their content needs streaming anyway.

Once we have the idea of infrastructure&#x2014;the community owning the connectivity&#x2014;and we fund the infrastructure transparently as infrastructure we go far far beyond network neutrality. We no longer have to contain the bits within billing paths and there is no reason not to leak it out to provide ubiquitous and extensible wireless coverage. This is where things get exciting because that&#x2019;s a real tipping point &#x2013; once we get past the fear of abundance (as the carriers explicitly decry in name=AssuringScarcity) we have no barriers against ubiquitous wireless coverage and, even better, anyone can extend coverage even to subbasements or caves or wherever. You can then have you medical alert bracelet call home instead of waiting for someone to read it and then find a phone.

This why I don&#x2019;t like the whole focus on broadband and am not convinced Korea is the right model. I sued to think minitel in France was a great idea but in the end it kept them off the Internet. I think of broadband as being like a railroad when we really want to be able to walk and drive where we please. It&#x2019;s easy to get speed but coverage is more important.

We can argue about the technical details of how infrastructure works but it would be hard to do worse than today&#x2019;s misaligned incentives.

For entertainment purposes you can read about viewing sidewalks in terms of services. Of course no one would charge for sidewalks &#x2013; after all it&#x2019;s just concrete and dirt and maybe some hops, skips and jumps when we go groundless for a short distance.

-----Original Message-----
From: David Farber []
Sent: Wednesday, June 21, 2006 10:15
Subject: [IP] more on Summary for Congress of proposed NN Act Proposal

Begin forwarded message:

From:   Gerry Faulhaber <>

Date:    June 21, 2006 10:07:41 AM EDT



Subject: Re: [IP] Summary for Congress of proposed NN Act Proposal

[for IP]

Amazingly, I find myself in agreement with Dana Blankenhorn. This business of restricting the use of Internet to only service that follows IETF/RFC protocols really is fairy dust. Does anyone think that customers really care about &#x201C;IETF/RFC Inside&#x201D;? In the few minutes since I read Dana&#x2019;s post, I have thought of a dozen names that Comcast/Verizon could call it other than Internet that would work just fine in the marketplace. And what about all the non- complying systems in place today?

I also wholeheartedly agree with Dana about making the market competitive as the only true solution to this. However, he seems to think that Congress must act to &#x201C;take away their monopoly right of way.&#x201D; In fact, Congress already did; the Telecom Act of 96 removed all local monopoly franchises, period. Even further back, there are FCC Pole Attachment rules requiring telephone companies to share their poles at specified rates. Everything is actually in place for competitors to enter.

The question is: with all the railing against &#x201C;monopoly&#x201D; BB providers, and all the rant about how well it works in Korea, how come we haven&#x2019;t seen competitive entry? And with all the hype about unlicensed wireless as the answer to the maiden&#x2019;s prayer, how come we have almost no private entry into wireless BB (except Clearwire)? I&#x2019;ll bet if all those great entrepreneurs spent less time writing outraged letters to Congress, IP, etc., and more time building a business plan to offer competitive BB, all our problems would be solved. And yet, and yet....where are the competitors? Why so much whining and so little market entry? Come on, guys; if it&#x2019;s a great business for Comcast/Verizon (highly questionable, actually) then it should be a great business for you. Yeah, it&#x2019;s you I&#x2019;m talkin&#x2019; to, buddy.

Dana has it absolutely right; what he doesn&#x2019;t have (and should have) is a business plan. If he doesn&#x2019;t have it, then why not any of those guys who signed on to the Internet Platform thing?

Professor Gerald Faulhaber

Wharton School, Univ of Pennsylvania

Philadelphia, PA 10194

Professor Univ of Pennsylvania Law School

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