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[ NNSquad ] re Competitor access to telco fiber would fix "net neutrality"

----- Forwarded message from dfarber <dfarber@me.com> -----

Date: Sat, 28 Aug 2010 13:35:10 +0000 (GMT)
From: dfarber <dfarber@me.com>
Subject: [IP] re  Competitor access to telco fiber would fix "net neutrality"
Reply-To: dave@farber.net
To: ip <ip@listbox.com>

Begin forwarded message:
From: John Gilmore <gnu@toad.com>
Date: 26 August 2010 4:32:51 PM
To: dave@farber.net,ip <ip@listbox.com>
Subject: [IP] Competitor access to telco fiber would fix "net neutrality"

The Washington Post mistakenly editorialized:
> FOR MORE THAN a decade, "net neutrality" -- a commitment not to
> discriminate in the transmission of Internet content -- has been a
> rule tacitly understood by Internet users and providers alike.
> But in April, a court ruled that the Federal Communications
> Commission has no regulatory authority over Internet service
> providers. For many, this put the status quo in jeopardy Without
> the threat of enforcement, might service providers start shaping the
> flow of traffic in ways that threaten the online meritocracy, in
> which new and established Web sites are equally accessible and sites
> rise or fall on the basis of their ability to attract viewers?

So-called network neutrality isn't a magic principle that somehow
everyone followed because it hadn't occurred to them to violate it
yet. It didn't exist only until April when the FCC found a limit
on its powers. It's much deeper than an enactment of Congress.

The "rule tacitly understoood" has been enforced for more than a
decade by CUSTOMERS, not by regulators. Any ISP that tried to
restrict what its customers did, or to discriminate against its
customers' traffic, would LOSE THOSE CUSTOMERS to a competing ISP.
AOL, MCI, Compuserve were all forced to open their walled gardens that
only let you talk to their other customers. The same is true in
shoes, in groceries, in cars, and every other free market. We
consumers aren't stuck with bad suppliers, we can pick better
suppliers -- or become a supplier ourselves. The government doesn't
have to sternly reform self-serving companies; we consumers do that
for ourselves. They go out of business when their customers switch to
somebody better.

What has changed in the last 15 years is that regulatory actions have
eliminated competition in the broadband Internet market. Now that
many customers have no serious opportunity to pick an ISP who offers
better terms, of course the existing ISPs are going to maximize their
own revenue and convenience at their customers' expense.

It's convenient that the telcos have locally-regulated cable companies
around, since otherwise high speed access would be too obviously a
monopoly. But a "duopoly" sounds much better -- it sounds like
competition even though it ain't. It's just as cushy for the
duopolists, because anybody unhappy with BOTH providers doesn't have a
chance to start a third, fourth, fifth, or twentieth competitor. So
of course both providers, who are benefiting from this situation, will
evolve their terms in tandem, while making sure the rules remain that
no new competitors can come in and upset their cozy deal.

The cure is easy, but apparently not obvious to most people. It is to
re-establish competition in the ISP market just above the level of the
wires and fibers. The wires and fibers can remain a monopoly, or
duopoly, regulated by the government as they are today, as long as any
ISP has the power to lease them at the same price. This is actually
the law today, except for an exception that swallowed the rule for
high speed access.

The thriving and competitive ISP market of 1995 existed because anyone
could go into business as an ISP, leasing point-to-point wires and
fibers and phone lines from telcos at non-discriminatory prices
related to their cost-plus-regulated-profit. This was because of a
long series of regulatory decisions starting from the Carterfone
decision, requiring the companies who had a monopoly on wired
infrastructure to lease those wires at a fixed price to anyone who
wanted them. ISPs could buy phone lines, could buy leased lines (56K,
T1, T3, etc), and could hook them together into an Internet.

When I didn't like the terms available from early ISP's, I made my own
cooperative ISP with friends. When the nationwide ISP who connected
us to the larger Internet threatened to cut us off (for violating
their terms prohibiting sharing of our connection), we found another
nationwide ISP who was happy to connect us to the Internet.
Ultimately our network, "The Little Garden", connected fifty or sixty
little mom-and-pop ISPs, and hundreds of other customers, with the
backbones of several large international ISPs. We had customers and
partners all over the West Coast. We offered reasonable prices and
great terms, which meant that any national ISP who wanted to compete
in our service area also had to offer great terms. We were happy to
take any customers who the big ISPs wanted to drive away with
discriminatory terms.

And thus the "rule tacitly understood" was enforced -- not by a
regulator, but by free competition for the business of consumers free
to choose a supplier. But this only worked because new suppliers --
like me -- were free to jump into the market whenever the existing
suppliers started pissing off their customers with bad terms. And if
I became a bad supplier, YOU were free to jump in and serve my
customers with better terms, better prices, faster service. Yes,
you, the reader. Starting a business isn't rocket science; millions
do it every year.

Indeed, the speed and cost of DSL technology outcompeted our low-speed
Internet market. Again this happened because the monopoly telcos were
required to make their wires available to competing DSL companies, and
customers were free to choose any DSL company they wanted. When
customers deserted low speed telco ISPs in droves, these new
competitors forced the telcos to offer DSL themselves, which they had
not previously offered. (The telcos also played dirty tricks against
those competing companies, such as cross-subsidizing their DSL service
with telephone revenues.)

At that point the telcos finally noticed what was happening, and
deployed their lobbyists to make sure it wouldn't happen again in the
next generation. They knew the FCC wanted fiber deployed widely.
Optical fiber had been invented by AT&T's Bell Labs, and the Bell and
ex-Bell system was already deploying it as fast as economically
possible, throughout their whole network. They were putting in fiber
everywhere, because it was cheaper than copper, and upgradeable to
much higher future speeds at the endpoints rather than by ripping out
the whole length and replacing it. Competing long-distance fiber had
already overturned the telcos' cushy long-distance market. But their
lobbyists convinced gullible FCC regulators that they would stop
putting in fiber unless the FCC EXEMPTED fiber from the rule that said
the monopolists had to share their facilities with competitors. (This
was a Big Lie on par with Hollywood claiming that they'd stop
releasing movies if the government didn't prohibit consumers from
copying them.)

The FCC bought the Big Lie, and exempted fiber from the general rule.
The result is today's "duopoly", in which you have no choice among
competitive ISPs. Oh, you can pick a dialup provider, or start up a
new dialup provider. You can pick a DSL provider, or start up a new
DSL provider. But you can't pick a provider with speeds higher than
what copper wires can carry -- nor can you start up a competing
higher-speed-than-DSL provider. Your monopoly telco has already
installed a huge amount of "dark fiber" in your neighborhood. (There
are four almost-empty 100+-fiber cables within three blocks of my
house: two owned by the city, one by AT&T, one by Comcast. I can't
get access to any of them.) Your telco doesn't have to let anyone use
that fiber to compete with them. The FCC told them so.

Fixing this in the 2010 market would be pretty simple. Get the
regulators at the FCC to rescind their ruling that exempts fiber
from the standard rule that monopoly telcos have to lease out their
facilities to competitors at their cost plus regulated profit.

Now, listen up, you people who think the FCC should be regulating "the
Internet" to protect you from rapacious monopolists. The FCC already
has the well-established power to fix this problem. They created the
problem in the first place and they can fix it. It's a regulatory
problem at the wires-and-fibers level, not a problem at "the Internet"

Why do you think that the FCC hasn't already noticed and fixed this

Why do you think that the FCC would regulate "the Internet" to serve
YOU instead of to serve the companies who have spent decades and
hundreds of millions of dollars learning exactly how to manipulate

It's because you don't even know what to ask the FCC for. Instead of
asking them for the simple fix to your real problem, you ended up
asking that they be given NEW powers to manipulate things at much
higher levels in the communications infrastructure. The FCC won't
bother correcting you -- they love it when you call for giving them
more power. They don't really care about how good your communications
are; like any regulator, or anybody else really, their job is to make
their own lives cushy. And the monopoly telcos will be happy to help
them with that. The telcos would love it if the FCC had more power to
regulate their competitors higher up in the protocol stack. Because
any power you hand to the FCC is power you're handing to the telcos,
the world's experts on pulling the strings at the FCC.

You've been duped into this Network Neutrality sideshow, and you're
now begging Congress for larger chains and bigger fetters. All you
really had to do was lobby the FCC for a simple change that is already
within the power of the FCC. Yes, of course, the telcos will oppose
such a change with all their might. But if you as consumers and
Internet experts and activists can't get the FCC to deliver a wide
open competitive unrestricted broadband market WITH A POWER IT ALREADY
HAS, merely enforcing the general rule for telcos that it already
enforces on every other aspect of telco behavior, why do you think
you'll be able to get the FCC to do that WITH BRAND NEW POWERS?

John Gilmore

----- End forwarded message -----