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[ NNSquad ] Re: "Regulating" the Internet -- and Distinctions

Brett Glass wrote:

> This is not correct. The FCC's order regarding Comcast regulated not the
> physical layer but network management practices on ALL layers, from
> physical to application.

I doubt they'd be regulating Comcast at all if they didn't have a de
facto monopoly on high speed local digital transmission facilities in
their service areas.

If the regulations on Comcast regarding upper layers basically say
"hands off", then those are good and necessary regulations.

> I agree. Google's 80% market share constitutes a monopoly. So does the
> ILECs' stranglehold on backhaul facilities used by all providers to
> reach the Internet.

Wow, we finally agree on something. At least partially. The ILEC
stranglehold on back haul facilities is indeed a serious problem. But
back hauls are only one segment of the local digital transmission
system. The cablecos and telcos also have a stranglehold on the access
links to individual houses.

We disagree on Google. They may have a large market share, but there's
nothing to prevent someone else from entering their market to compete
with them. That part of the Internet is open and highly competitive. It
may be difficult because Google has some pretty good services and a lot
of smart people, but the antitrust laws specifically recognize market
success that is legitimately earned.

Lauren just put out a blog entry that says the same thing. He's right on

> Google does not fall into this category, but the ILECs do. It's worth
> noting, though, that the essencial facilities they control are not used
> solely for Internet access. Cellular providers have also complained,
> justifiably, that backhaul for their cell towers has been subject to
> anticompetitive pricing.

Precisely. That's why I refer to "local digital transmission facilities"
because it really doesn't matter if they're used for Internet access or
POTS or TV or cellular back haul. Bits are bits. In fact the telcos and
cablecos should not be allowed to make any distinction among
applications. Their job should be limited to providing the series of
tubes. Period.

> The FCC and Congress have been persuaded to shelve this issue by the
> name it's been given by the ILECs: "special access." But in fact, there
> is nothing "special" about wholesale access to essential facilities. It
> is fundamental to competition.

Wow. Again I'm impressed that we agree on something. Equal access to
local digital transmission facilities is indeed fundamental to
competition. The ideal situation would be to have an abundance of
companies bringing fiber to my house and actually competing with each
other on price, speed, reliability, etc.

But that's not likely to happen. So the next best thing is to identify
the anti-competitive choke points -- i.e., the local digital
transmission facilities -- and regulate just them and nothing else as
common carriers. Past experience shows that the entities that own and
operate these facilities cannot be trusted to provide their own services
over them. Their facilities must be made available on equal terms to
anyone wanting to buy them -- ISPs, cellular carriers, whoever, at
tariffed rates that provide a reasonable rate of return.

This is hardly a new concept, we've been doing it for over a century.
Why is it so hard for some people to understand the need for it here?