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Thursday, July 7, 2005

Openness Post-Brand X: It begins . . .

The release this week of Public Knowledge's "Principles for an Open Broadband Future" is important in at least two respects, even for those of us who disagree with some of the white paper's arguments and conclusions. First, the paper underscores that, in the wake of the FCC's Supreme Court victory in Brand X, Capitol Hill is the new battlefield for advocates of Internet openness. Second, it underscores (for the most part, anyway) how much the openness debate has evolved since the FCC began its effort to promote broadband investment and innovation by declining to saddle these services with onerous regulation.

Continue reading Openness Post-Brand X: It begins . . . . . .

posted by Kyle Dixon @ 2:18 PM | Broadband, Cable, Capitol Hill, Communications, Innovation, Internet, Net Neutrality, Supreme Court

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Tuesday, June 28, 2005

Broadband Post-Brand X: The Long and Winding Road

As I have stated repeatedly, the FCC needed to win the Brand X litigation to carry out its plan to minimize regulation and thereby bring consumers the benefits of investment and innovation in competing broadband networks. Based on his reaction to Monday's Supreme Court decision affirming the FCC, Chairman Martin appears to agree. But even as we (or at least some of us) celebrate Monday's decision as a victory for consumers, it is important to remember that, for the FCC, this is only a first step down a long and winding road.

Continue reading Broadband Post-Brand X: The Long and Winding Road . . .

posted by Kyle Dixon @ 3:50 PM | Broadband, Broadband, Cable, Communications, Innovation, Internet, Net Neutrality, The FCC, Wireline

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Thursday, May 12, 2005

The Broadcast Flag and Minimum Requirements for Broadband

As Ray noted last week, the D.C. Circuit rebuffed the FCC (again) for asserting authority it does not have. Yet despite the angst and juibilation surrounding the "broadcast flag" decision, the case did little to undermine the already-tenuous basis for the FCC to assert its so-called "ancillary" authority to regulate broadband "information services" under the Communications Act. The decision does, however, add more kindling to the fiery debate over which, if any, baseline obligations should be imposed on broadband to the extent competition justifies protecting these services from more intrusive regulation.

Continue reading The Broadcast Flag and Minimum Requirements for Broadband . . .

posted by Kyle Dixon @ 1:51 PM | Broadband, Communications, Internet, Net Neutrality, The FCC, VoIP

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Thursday, May 5, 2005

CA Consumer Bill of Rights: It's Baaaaack . . .

This week's reincarnation of a "consumer bill of rights" in California dramatically illustrates the need to clarify the appropriate role for state communications regulators as part of overall telecom reform. But clarifying state and federal regulators' respective roles must go beyond considering who regulates; we also must consider why they regulate. Specifically, we must consider whether state regulation should attempt only to further basic social goals, or whether states should be allowed to engage in broader economic regulation.

Continue reading CA Consumer Bill of Rights: It's Baaaaack . . . . . .

posted by Kyle Dixon @ 5:47 PM | Broadband, Capitol Hill, Communications, Net Neutrality, VoIP

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Friday, April 29, 2005

Another Lesson from a Mad River, Courtesy of Professor Lessig

It's not often that the cable industry can count on help from Lawrence Lessig regarding "network neutrality" -- the question of whether cable modem and other broadband service providers should permit Internet users to access the content, applications and devices of their choice. And yet, Lessig appears to have conceded an argument on which cable may rely to resist regulation if the FCC wins the Brand X case in the Supreme Court. That case ultimately will decide whether the agency can classify cable modem service as a largely unregulated "information service" under the Communications Act. Lessig's concession, however, may not be enough to keep the FCC from enforcing net neutrality even if the Court hands the agency a victory.

Continue reading Another Lesson from a Mad River, Courtesy of Professor Lessig . . .

posted by Kyle Dixon @ 11:25 AM | Broadband, Cable, Communications, Net Neutrality, The FCC

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Tuesday, April 12, 2005

VoIP Blocking: The Case of Clearwire

Clearwire, a wireless broadband company backed by Craig McCaw and just entering US markets, has caused a minor stir by saying up front that it will block third-party VoIP applications like Vonage. Clearwire's terms of service disclose this fact that they can restrict high-bandwidth applications.

Continue reading VoIP Blocking: The Case of Clearwire . . .

posted by Ray Gifford @ 2:53 PM | Net Neutrality, VoIP

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Tuesday, March 15, 2005

Tivo, Comcast, Modularity and Producer Surplus

Tivo benefited today from its announced long-term deal to provide DVRs to Comcast. It is really a digital age morality tale. Recall, a Comcast-Tivo deal had been on the table last summer (NYT reg. required), but Comcast walked away when Tivo's demands proved too rich.

In other words, Tivo miscalculated its value and its substitutability in the market -- and its stock price plummeted. Consumers want an integrated video/DVR product and Tivo doesn't have the cache of, say, the iPod to demand a bulk of the producer surplus. To its credit, though, Tivo did not do what a more cynical player would do: go to the regulator to ask Comcast to "unbundle" the DVR from the programming service, or ask Senator McCain to hold hearings about how DVRs should be offered "a la carte."

Instead, Tivo and Comcast worked out a market deal, and now consumers will have the option of Tivo and Comcast bundled together, or Comcast and a cheaper Motorola-made DVR.

posted by Ray Gifford @ 3:19 PM | Net Neutrality

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Sunday, March 6, 2005

The VoIP Blocking Consent Decree

The home page for Madison River Communications claims that "What We Bring Together...Sets Us Apart." In light of the consent decree that the rural LEC entered into with the FCC earlier this week for blocking VoIP services, what now sets Madison River apart is that it is the first carrier found to have violated Chairman Powell's 'Net Freedoms. What it brings together is a series of issues and a consent decree which seemingly raises more questions than it answers:

The FCC's Enforcement Authority
The most interesting legal issue stemming from the consent decree is the nature of the FCC's jurisdiction and enforcement authority. The Commission cites section 201(b) as its statutory authority, thereby treating Madison River (a DSL provider) as a Title II common carrier, despite recent Commission efforts (through its Cable Modem Order and the Wireline Broadband NPRM) to bring these broadband providers under the deregulatory provisions of Title I.

Continue reading The VoIP Blocking Consent Decree . . .

posted by Adam Peters @ 6:24 PM | Net Neutrality, The FCC, VoIP

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Wednesday, October 20, 2004

Lessig on Coase

After reading Larry Lessig's article on "Coase's First Question" in the current issue of Regulation, I finally understand the argument that the commons proponents have been making. A commons for goods such as spectrum and broadband is the same as free trade, and we all know that free trade is a good thing. Q.E.D.

Lessig's article--which is a comment on Bruce Owen's very good discussion of "net neutrality" in a property rights context in the Summer 2004 Regulation--illustrates the pitfalls of practicing economics without a license. (Owen's article is a short version of the paper Bruce and Greg Rosston presented at PFF's Net Neutrality conference last year, which will be included in our forthcoming conference volume.)

Citing Coase's famous 1959 Journal of Law and Economics article on the FCC, Lessig argues that "proper-Coaseans" first ask the question of whether the resource in question should be the subject of property at all, before asking where the property right should reside. This is in contrast to "property-Coaseans" (e.g., Owen), who go straight to the second question.

Clever language aside, Lessig's "proper-Coasian" concept is based on quoting Coase out of context. As Lessig indicates, Coase did write, "All property rights interfere with the ability to use resources. What has to be insured is that the gain from interference more than offsets the harm it produces." But, the point he was making (yes, I did go back and reread it) was that once property rights are defined, the market can bring about an optimum utilization of those rights and that, in the context of spectrum, the optimum interference, e.g., between operators on adjacent frequencies, is not necessarily zero. He was not suggesting the need to subject every property rights decision to an ex ante cost-benefit analysis to determine "whether the resource should be the subject of property at all." That would be a pretty radical notion, indeed.

The free trade argument comes from a 2002 article on spectrum rights by Yochai Benkler--another apostle of the commons approach--that Lessig also quotes. The argument appears to go as follows. The right to trade internationally, like spectrum, is a valuable right. If we were to create a set of tradable international trade rights and auction them off, people might pay a lot of money for them. But we know that this "property system" would interfere with free trade and be inefficient. The same reasoning applies to goods like spectrum and broadband.

Critiquing this argument would be a good question for an undergraduate economics exam. But the central point of the answer is obvious. Creating international trade rights creates an artificial scarcity where no real scarcity exists. This, by definition, is inefficient. In fact, such rights--quotas--have been used to protect domestic industries, with adverse effects on efficiency that are familiar to most economics undergraduates. Spectrum and broadband, on the other hand, really are scarce, which is why they need to be subject to a property-rights regime to be allocated efficiently. Broadband obviously has scarcity value, because it takes lots of real resources--capital and labor--to provide it. We know that spectrum is scarce, at least in the amounts that the government has made available, because it commands very high prices in the market. Q.E.D.

posted by Tom Lenard @ 1:36 PM | Net Neutrality

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Blog Main
Recent Posts
  Openness Post-Brand X: It begins . . .
Broadband Post-Brand X: The Long and Winding Road
The Broadcast Flag and Minimum Requirements for Broadband
CA Consumer Bill of Rights: It's Baaaaack . . .
Another Lesson from a Mad River, Courtesy of Professor Lessig
VoIP Blocking: The Case of Clearwire
Tivo, Comcast, Modularity and Producer Surplus
The VoIP Blocking Consent Decree
Lessig on Coase
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