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more on Two notes on Network Neutrality
From: David Farber <dave () farber net>
Date: Wed, 1 Nov 2006 09:42:18 -0500

Begin forwarded message:

From: Gerry Faulhaber <gerry-faulhaber () mchsi com>
Date: November 1, 2006 9:36:37 AM EST
To: dave () farber net
Subject: Re: [IP] more on Two notes on Network Neutrality

[for IP]
Actually, slow-rolling DSL to DLECs is a particularly apt analogy. The FCC required the resale of DSL at regulated rates. However, the complexity of the relationship between ILECs and reselling DLECs demanded a level of monitoring that was far beyond the ability of any regulatory agency to enforce compliance, and as a result the ILECs could forestall something they didn't want: mandated direct competitors. There is a growing consensus that the mandated resale of both DSL and wireline has been a failure: we gave the FCC a virtually impossible job to do. Not that they didn't try, but the Telecom Act of 96 was virtually unimplementable (I wrote a paper about this a few years ago: "Policy Induced Competition: the Telecommunications Experiments," in Information Economics and Policy, at http://rider.wharton.upenn.edu/~faulhabe/732/Policy-Induced% 20Competition.pdf) . If we enact network neutrality legislation/ regulation, the complexity of enforcement (due to complexity of monitoring) will again be far from the capabilities of any regulatory agency, and for exactly the same reasons that mandated resale of DSL lines didn't work. So we get a raft of new regulations (in the name of competition) that will also not work; what a great idea!

Net neutrality is a different story; with the exception of wireline telephone/VoIP, the BB ISPs are not really in the applications provider business, so they have no direct competitors (again, save VoIP). Their profit optimal strategy is to maximize the value that customers get from their service, the better to raise prices. You don't get people to pay you more by giving them worse service; you get more $$$ by providing a better service. Does this mean we don't have to watch the telcos/cable guys like a hawk in the VoIP space? Of course not. But the proper tool to protect against anticompetitive actions is not regulation (the DLEC case proves that's a loser; why do we want to do it again?) but antitrust, and in particular private antitrust suits. If you've got a beef as an applicaton provider against an ISP, well, take 'em to court. It is, after all, the American Way. Since we already have antitrust laws to protect against anticompetitive behavior, we don't need a whole bunch of new regulations (that won't work) to solve this problem. Use the tools we have; if you think your blood is on the floor because of anticompetitive conduct by an ISP, then prove it in court, based on the facts.

And I repeat the challenge: other than Madison River, show me anticompetitive conduct by the BB ISPs that would be fixed by NN regulation.

Professor Gerald Faulhaber

----- Original Message ----- From: "David Farber" <dave () farber net>
To: <ip () v2 listbox com>
Sent: Wednesday, November 01, 2006 8:42 AM
Subject: [IP] more on Two notes on Network Neutrality

Begin forwarded message:

From: "Mike O'Dell" <mo () ccr org>
Date: October 31, 2006 11:31:35 PM EST
To: dave () farber net
Subject: Re: [IP] Two notes on Network Neutrality

David Farber wrote:
A note from Lauren and a note from Faulhaber (a co-author of a memo with me and others)

Lauren may be ranting, but that doesn't make him wrong.

the DSL CLECs were methodically slow-rolled out of existence
by aggressive predatory tactics by the RBOCs.  we saw that
first-hand every day trying to install and support DSL customers.

for someone to suggest that the broadband service business is just peachy, and that industry-destroying anti-competitive behavior in the space hasn't happened before and is unlikely to happen again, especially given its unchallenged
success at eliminating competition, is patently absurd.


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