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Technology Stocks : The *NEW* Frank Coluccio Technology Forum

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From: LindyBill1/30/2007 1:05:33 AM
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The Inegalitarian Web
Peter Huber 02.12.07, 12:00 AM ET
Peter Huber is a senior fellow of the Manhattan Institute and coauthor of The Bottomless Well (Basic Books, January 2005).

The new Congress is determined to enact a "net neutrality" bill. Nobody yet knows what those two words mean. The new law won't provide any intelligible answer, either. It will, however, put a real drag on new capital investment in faster digital pipes by making it illegal for many big companies to help pay for them, while leaving everyone guessing about the details for years. That last bit is great news for all the telecom lawyers (like me) who get paid far too much to make sense out of idiotic new laws like this one.

The law, we are told, will just make sure that the likes of Verizon and Comcast will continue to treat everyone's Internet traffic the same--Google's, Yahoo's, yours, mine. And we need this law because those phone and cable companies have such an iron grip on the wires that without the law they control all the content, too. A simple two-word law is all we really need--an equal rights amendment for bits.

It will be a 2 million-word law by the time Congress, the Federal Communications Commission and the courts are done with it. Grand principles always end up as spaghetti in this industry, because they aim to regulate networks that are far more complicated than anything you have ever seen heaped up beside an amusing little glass of chianti.

The network that's lighting your screen today isn't neutral at all. Google, Amazon, Citicorp--all pay a privately negotiated price for better connections from their huge banks of servers to the Internet. What they get are fast connections from their premises--and for just their content--to one of the several dozen "network access points" that channel data into the Internet's sprawling, ultrahigh-speed backbone.

Then they buy still more speed--for their content and no one else's--from companies like Akamai. Akamai provides neutrality-busting service. The company has deployed a global array of servers that cache content supplied by its customers so that it's sitting out there when it's needed, much closer to the people who need it. Akamai can push its strategy a long way by cuddling up close to, say, Comcast or Verizon. The net neutralizers may regulate some of that, but nobody yet knows how much. In other analogous contexts, the FCC has had to develop a large, arcane set of rules to define "affiliated" enterprises.

If Google signs up with Akamai and Yahoo doesn't, Google's answer lights up your screen quite a lot faster. And Google sees to it that the very first thing delivered to your screen is a pitch for the company that paid Google to pay for the better-than-neutral access to your eyeball. The net neutrality law won't block any of this.

So what will it block? Now, at last, we're getting close to where the lawyers will frolic. What the neutralizers are after is what they call "last mile" and "end user" neutrality. But that only raises two further questions: How long is a mile, and where does it end?

The proposed law would block any Akamai-like technology embedded in the very last switch, the last stretch of wire that links the Net to digital midgets like you and me. That would be any technology that--for a fee--caches content or provides priority routing to speed throughput. But the ban on the fee would apply only if two legal conditions are met. First, the hardware or software that gives preference to some bits over others would have to be situated close to us midgets. Second, the fee would be banned only if it was going to be charged to someone quite far away. Exactly how close and how far, no one knows. Give us five or ten years at the FCC and in the courts and we lawyers will find out for you.

Do you follow the arcane distinctions here? It would be quite legal for Comcast to charge you extra for a higher-speed connection to everyone or even just one provider of your choice--it does now--but illegal for Comcast to strike a deal with Google to chip in.

What irony that Google and other content providers are begging Congress to protect them from Comcast, Verizon and AT&T. Not long ago Google successfully bid to deploy a municipal Wi-Fi service for the city of San Francisco. As one part of that proposal, it promised to offer a free tier of wireless access to all. Free means paid for by advertisers, whose pitches will be the first thing you see whenever you log on to San Francisco's Google-neutral network. The whole free broadcast network--radio and television--was built this way. But the net neutrality law would outlaw any comparable arrangement on the Net. It would be verboten, that is, for content providers to share the cost of running digital connections to the customers they most want to reach.
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