Friday, January 20, 2006

Lawrence Lessig tears 'em a new one

Every so often you run into a piece that's so dense with good sense that you are hard-put to pull out appropriate teaser quotes. That's the way it is with Lawrence Lessig's recent tear on net neutrality. He vents his frustration with the sort of nonsense that tries to justify handing the internet over to the corporations that own the last mile wires by pretending that the internet succeeded because of its "unregulated" environment. 'Tain't so as Lessig points out:
...when the Internet first reached beyond research facilities to the masses, it did so on regulated lines — telephone lines. Had the telephone companies been free of the “heavy hand” of government regulation, it’s quite clear what they would have done — they would have killed it, just as they did when Paul Baran first proposed the idea in 1964. It was precisely because they were not free to kill it, because the “heavy hand[ed]” regulation required them to act neutrally, that the Internet was able to happen, and then flourish.

So Waltzman’s wrong about the Internet’s past. But he’s certainly right about what a mandated net neutrality requirement would be. It would certainly be a “complete step backward for the Internet” — back to the time when we were world leaders in Internet penetration, and competition kept prices low and services high.
Good stuff, and follow that link in the quoted text for a long, calm dissection of how the internet was born in government research and forethought and first thrived under mandatory "open access" rules. Also don't miss the classic little logical structure he builds at the end of his article. It's always a pleasure to see the door shut so firmly on nonsense.

Lessig takes, in my judgment, one small misstep: he makes the too-simple claim that it is broadband's nature as infrastructure that makes it an inappropriate place to rely on "markets." The market issue is more profoundly economic than that. Happily a writer on techdirt rises to the occasion:
That's rather simplified, but is mostly right. The issue isn't that it's infrastructure -- but that the infrastructure is a natural monopoly, where the effort to build more than one of the same style of infrastructure does more harm than good, and the value is only in having the same infrastructure reach far and wide (network effects).
That's just right...Markets are almost always the right solution for economic problems. But natural monopolies are the classic example of a situation where relying simply on markets is a recipe for disaster. It's not that "infrastructure" is a problem for competitive solutions, it is rather that we call some enterprises infrastructure and expect government construction or subsidy/regulation precisely because private providers can't economically provide a service which the community finds valuable because of its network effects. --The roads are a good example.

8 comments:

Anonymous said...

In your link, Mike, the author in the article for Techdirt writes, "Have one full fiber system built (not the limited stuff the telcos are working on now) and let private companies compete using that network". This is based on the idea that government builds roads, but doesn't sell goods or services,(gasoline & etc) on these "open and neutral networks". The users of the infrastructure pay for the roads thru use taxes like the fuel tax, property tax ,(roads increase property value, sales taxes (roads bring consumers) and etc. The private market provides the goods and services, which creates the economy, privatly owned business, jobs, and taxes to fund the infrastruce cost. And it assumes that competition by private businesses keeps prices low and services high.

Well, we don't want to do anything that stupid in Lafayette. Thanks for pointing it out to us. We could have easliy have be sucked in by such BS.

Obviously, the solution to the problems of lowbandwith, poor services, high prices and controll of content, resulting from the lack of an open and neutural system created by the duopolies, is to set up our own fiber company based on the same business model, a closed and non neutral system, as the duonoplies we all detest. If they can get away with it why can't we. And if it loses money, we simplly subsidizes its loses with rate increases on our utility monopoly. After all, why shouldn't people that are not cooperating, by paying to use the system, help pay for it? Thats fair. We have the vote, so forget them. In orweian terms "all people are equal, just some are more equal then others". Or as the republicans so elequnity said, "We hold true to our belief in free markets and less government, so we declare that the goverment business of competing in the sale of goods and services of telecommuications equals free market and less government". Hopefully, in the end we will drive all competition out of Lafayette and free ourselves from our corporate masters and their lobyist henchmen that corrupt our government.

Why don't we just cut right to the heart of the matter. Lets pay our lobyist to reappeal the (un)fair competition law, vote to seize the assest of bell and cox through the right of eminant domin, create our own monoply on telecommunictions. It would be cheaper and we have the votes. Makes more sense then making the citizens, espeially the poor, pay thru utility rate increases, that takes to long. Then we wouldn't have to deal with lawsuits and the courts telling us what we are doing is illegal and unfair.

John said...

I can see why you don't want to use your name...you feel free to take clearly inconsistent positions that you would never feel free to do if people knew your name.

Tell us who you are and what you favored during the referendum campaign. Won't? Not surprised. If you were openly to admit your opposition it'd be awfully hard to pretend innocence in one post and display this sort of spleen in the next. (Some opponents are honest enough to acknowledge their opposition and their name when they post here. It's even possible to have a conversation with them. Thanks, David.)

For instance: you get studiously upset in favor of net neutrality. But you never demand net neutrality of anyone BUT LUS--then or now. The opportunism is transparent.

You read the article very narrowly and extract from it only what you want to hear...not what the author clearly says. I can see where you think it might be an advantage to mischaracterize the author but the piece is actually a full-throated endorsement of public ownership of natural monopoly; and reader can see this for themselves. It sketches out the ideal. And the author rightly lambasts the duopoly. People are not so easily lead as you seem to want to believe. They realize that, however ideal it might be (and I share that ideal) to impose your principles on LUS, would be suicide without first disarming the opposition. Not long ago all you wanted was a transparently faux "equity." Now you'd like to force LUS to compete against enormously powerful corporations using a spectacularly unequal business plan. A little consistency is called for.

I've said before I'll say again: the ONLY possible path to an open network in Lafayette is if LUS develops a successful system. Cox and BellSouth will never, ever, give up the profits they reap off control of the network. Do you think they will ever open their systems? They are currently lobbying to close down the only half-open parts right now. It will ALWAYS be in the interest of their shareholders to take both the profits that accrue to network transport and that which results from content. Our interests as customers will always be trumped by their ownership. As it should be, I concede. The ONLY way we will every have an open system in Lafayette is if the owners of one of the systems decides it should be open. ONLY the citizen-owners of a public utility will ever find it logical to forgo the profits from content ownership for the price benefits to themselves of competition. If you really wanted an open system. You'd fight to make sure that LUS succeeded and then fight to convince the citizens that it was in their best interests to open their system in the way you suggest. You'd have an argument, a potentially reasonable one. But instead you fight the only possible path to what you claim to desire.

That's pretty transparent too.

Anonymous said...

So do we agree that the LUS fiber system should be open and neutral? But just disagree as to how we can get there?

John said...

Nope,

You persist in your self-confirming readings of other peoples words. I think (if we are to trust your current statements) that you think net neutrality is an ideal..but one of those strange ideals you are only willing to impose on LUS. You are resolutely unwilling to say that Cox or BellSouth should play by similar rules.

You are bound to be able to understand that if you restrict LUS to simply commodity carriage and allow BellSouth and Cox, on the other hand to reap large profits on content delivery you will put LUS in an impossible position: BellSouth and Cox will happily and regularly "cross subsidize" their network costs with their content profits. LUS would be put at a fatal disadvantage.

Is that your real agenda? Or are you willing to agree that your ideal of net neutrality should be applied to Cox and BellSouth at the same instant it applies to LUS.

If you can go there, and if you can come up with a realistic way to accomplish that then it might be time to think about imposing the same on LUS and we can have the discussion you seem to be angling for at the moment.

But speaking of realistic paths to a "structurally separated" system: I am much more interested in why you avoid responding to question about whether you think Cox or BellSouth will ever open their systems.

Do you?

Anonymous said...

Absolutey. If I were in charge, I would allow municipalities to mandate that all service providers must allow open competition over their wires. That's how it is for bell over the phone lines, I see no difference with it being over fiber or cable. So put me in charge and I will.

I think you keep thinking that I am against LUS building fiber. I am not. I am for it.
I think you keep thinking that I am somehow for bell or cox. I am not. I am for helping foster open competition.

LUS has more than enough fiber in place now to be open and neutral. Revenue from that could be used to expand the LUS fiber system to all parts of Lafayette. I do not believe that the only way to get a open and neutral network for lafayette is to close the open and neutral system we could have now, spend a lot more money, and then expect politicians to forego the revenue and power that will come with that, to open the system later. We can't get them to do it now before we spend $125 million, I don't think we will after?

Bell and cox are not evil. They are simply corporations with a mission statement, "profits". All decisions they make must first recognize that mission statement. Setting up government, whether by majority vote or polictal power, to have the same business model will result in LUS fiber being judge by it's profits. Future political campaigns will make LUS fiber company profits an issue. Regardless of how much penetration, bandwidth or anything else, I think that will take us down are road we will all regret.

Now, when you say "nope", are you saying you are not for an open and neutral system unless bell and cox are? So does that mean you will not support an open and neutual network. And if you say no, then can I conclude that the main reason you are against an open and neutral system is to protect the profits to LUS fiber system? It seems that your concern for LUS profits already has you pushing a closed and non neutral system you really don't agree with.

This is not my idea, I actually got it from you. But it's not about me or you. It's about what idea is best for Lafayette. I think we should aspire to the highest numerator, I am afraid we are settling for the lowest denominator.

John said...

You know, what I think we have here is a man arguing for a point he has fought against vigorously. I think that is why you don't reveal your name. If you had the courage of your convictions you'd reveal that and then part of the conversation would be about how trustworthy "endorsements" like this are.

Until that day I caution any readers to ask themselves just how much they should trust someone who feels that attaching his name to his words would work against his arguments.

---

I didn't ask you if you could wave a magic wand what would you do. I asked instead for you to come up with some reasonable, rational way to justify your ideological position. Pretending to be God or some imaginary telecom czar won't cut it. How, really would you "mandate that all service providers must allow open competition over their wires?" A concrete, real method that doesn't amount to waving a fantasy wand.

You are just wrong about BellSouth and their phone lines. There's been a big to-do over that recently and recent FCC ruling have let the Bells price virtually all resellers out of this market. NO EATel, NO ATT. You need to keep up. (xDSL recently went the same route...that vine is dying too.)

I can't imagine what you are thinking about in the "LUS has more than enough fiber now to open and neutral." If you are thinking about the current wholesale model that is senseless since it IS open and neutral. I've been over this with you endlessly. You don't challenge me when I explain it, you just ignore it. The wholesale model has been completely open. If the resellers won't sell you what you want that's really not LUS' fault--it's a classic market failure--one which LUS has said it plans to correct. On the other hand if you mean the retail model, which is partially closed then your statement is senseless because it is manifestly true that we DO NOT have enough fiber to serve everyone. I have to wonder if you'd be so sloppy using your real name.

You're right that BellSouth and Cox are not evil. They just act entirely in their own interest as a corporation and in the interest of their shareholders. That's all. LUS, on the other hand will only have the interests of its owners to heart. It will be motivated by what is best for Lafayette and its citizens. What you regard as fearful--that political issues will sometimes be raised about LUS' business seems 1) mostly unlikely (when was the last time water or sewerage was a big political issue?) and 2) Not a bad thing. As I have repeatedly said I think our having control of our own telecom infrastructure and being able to vote in, FOR INSTANCE, an open network is a real advantage. And it is something you will never, ever get from Cox or BellSouth.

I think I said clearly that I am not for laying anyones--my or your--ideological assumptions on LUS. This is in the realm of tough-minded business decisions. I gave a very logical reason as to why messing with LUS in that way would be destructive: LUS would be placed at a huge structural disadvantage if its competition could use profits from content to subsidize its broadband carriage rates. LUS, without a similar subsidy, would have to subsist on commodity bandwidth alone. This is a truly terrible business plan and if you were really interested in "good" business plans you'd admit it. That is my "real," and my "realistic" judgment.

Can I imagine a world in which my judgment would be different? Sure. And I can imagine a world in which all men are honest and completely forth-coming and never hide who they really are or what they believe. But I don't expect to see that ideal realized in my lifetime and I will not require anyone to live their life as if they believed everything that everyone told them. If something does not currently exist and there is no known way to realize in the world then it is merely a fantasy--pleasant or not. I think it is a fantasy of this type to believe that BellSouth or Cox will ever open their networks and hand a portion of the huge profits to be made off content over to someone else. It is always dangerous to live in a fantasy-world and for LUS to inhabit that one could easily be a business-breaking mistake.

A direct challenge: Do you think BellSouth and Cox will ever, ever open their systems up in the way that your fantasy has LUS doing?

Anonymous said...

Simple solution to the open network problem: In order to share (be a provider on) the OPEN LUS network, Bellsouth and Cox have to share or provide open access in a similar manner to their own newtorks.

I don't think that anyone truly wants to setup LUS in a way that really is unfair and hurtful to any legitimate business. I hope that that is not what you want, John. Is it?

At the same time, an open system would have to have safeguards against being corporate welfare too. I don't think that anyone really wants the incumbants to be able to come in and divide that up into two realms either.

I think that we can all agree that an open system that would bring MORE THAN ONE competitor to market to play effectively with the big boys would be the best for the comsumer!

The UNDERLYING REASON why we are even discussing this in the first place is because the MONOLITHIC, MONOPOLISTIC business models of Bellsouth and Cox are no longer effective ways to bring the best services to the consumer! Right?! Well, why are we trying to do the same thing that doesn't work?

Competition drives innovation and brings better services! You and Durel et al are so fond of talking about how the service levels of Cox and Bellsouth have improved over the last year (and taking credit for it) due to the mention of the LUS Fiber project. That's PROOF!!! Competition did that! That's what competition does! More competition brings MORE advances in services! And even better prices... or at least better values for the same prices.

Let's bring MORE COMPETITION to the big boys, not less.

John said...

I repeat:

A direct challenge: Do you think BellSouth and Cox will ever, ever open their systems up in the way that your fantasy has LUS doing.

Even if you are hiding who you are you could answer that one. It might entangle you oddly with other old allegiances should you over come out of the closet but still...

Now back to the latest evasion:

You say:"Simple solution to the open network problem: In order to share (be a provider on) the OPEN LUS network, Bellsouth and Cox have to share or provide open access in a similar manner to their own newtorks."

Surely Anono you understand that BellSouth and Cox have made it clear that they will never ride on LUS' fiber. Publicly, repeatedly. This isn't only here in Lafayette but in every place that muni fiber exists. It has NEVER been because the cities wouldn't have welcomed the income. It has ALWAYS been because the incumbents are determined to maintain their monopoly control over an integrated vertical monopoly of transport and content.

Sheesh...

Let's break down what you are actually suggesting and why it is exactly the sort of suggestion that would make the incumbents happy. (Is that a coincidence?)

According to this "plan" LUS first opens its system thereby putting itself at a huge competitive disadvantage to BellSouth and Cox who continue to rake in huge profits off video--the cash cow in this equation--in order to fund system upgrades. Knowing BellSouth and Cox's stated position of refusing to run on LUS' system with NO conditions they get the "brilliant" idea that maybe they'll be more successful if they tell BellSouth and Cox they have to open their systems to competition, and change a business model that made them some of the most powerful corporations in the country in order to satisfy a community's challenge down in Lafayette. It will never happen. In the real world BellSouth and Cox haughtily refuse (shock, surprise!) and LUS is stuck with the loss of income. Your plan would never advance beyond impoverishing the income potential of LUS. BellSouth and Cox's could only be thrilled.

Incumbent pleasure is the perfectly predictable, absolutely inevitable, outcome of playing that game.

I've emphasized that I am uninterested in fantasies. I think that it could be narrowly said that we share some abstract ideals. At least the persona that has been invented to argue here claims to share an ideological preference for structurally separated systems. If the person hidden behind that persona actually had Lafayette's best interests at heart and not his own or some corporation's then we'd see suggestions that take into account the real world constraints imposed by the regulatory world and corporate business models LUS faces. This is just the sort of dangerous-to-Lafayette suggestion that is engendered by ideological fantasies.

Here's what you could do that wouldn't involve you in deceptive fantasies that only hurt Lafayette: Stand Up, publicly, in your own name and announce your support for LUS and the city. Gather up any shred of respectability you retain and fight for the city's decision. Admit openly that BellSouth and Cox will never open their systems. Express whatever regret you feel that LUS is not in a position to open their systems in the face of intransigent opposition from incumbents who at every level continue to not only show no inclination to open their own systems but continue to lobby to for intensified monopoly control of their last mile strangleholds at both the state and Federal levels. Make it clear that you oppose those incumbent efforts and help fight them in order to gain the necessary credibility to pursue this path. Call for repeal of the (un)Fair Competition Act, for instance. Ask the people of Lafayette to all come together now to support the community's decision as you now do. Warn, if you like, that when the system is secure and profitable you intend to lobby for open systems and start trying to build a rational, real world case for that. Make it a local political issue; do the patient work of building consensus and coalition. Compromise occasionally. Organize.

That is the only possible path toward ANY real-world conversion of any of Lafayette's systems to an open architecture. Get serious or get over it.