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Net Neutrality Debate – Gilder Telecosm 2006

Gilder Telecosm 2006 - Net Neutrality

I woke up in SFO at 4AM to make sure I could get to Tahoe in time for this debate. I’ve written extensively on Net Neutrality and stopped once I realized it was unresolvable.

Broadband Brawl: A Debate Over Net Neutrality

  • Tod Cohen, Vice-President and Deputy General Counsel, Government Relations, eBay
  • George Gilder, Editor in Chief, Gilder Technology Report
  • Peter Huber, Senior Fellow, Manhattan Institute for Policy Research; Co-founder, Digital Power Capital
  • Lawrence Lessig, Professor of Law and Founder of Center for Internet and Society, Stanford
  • Paul McWilliams, Editor, NextInning Technology Research

(Italics are my comments. Plain Text is my transcription)

Moderator: Any retransmission or rebroadcast of this panel session without the express permission of your ISP is strictly forbidden. This got a good laugh.

My Conclusions

  • Huber is a very good speaker and was very persuasive. I need to understand the Title 1 and 2 details he speaks of.
  • Part of Akamai’s (AKAM) business model depends on Net Neutrality. They provide two main services – distributed IT infrastructure and QoS guarantees for content. If carriers charge for quality, then content providers could get QoS right from the carrier, and wouldn’t need Akamai. Or Akamai would have to pay the carrier for quality carriage.
  • Majority of discussion focused on the Bellcos and very little on the Cablecos. In the context of this debate they should be equivalent. Yet everyone perceives the Bellcos are more likely to break net neutrality. I understand Verizon (VZ) and AT&T (T ) have publicly rumbled about charging for access, and Comcast (CMCSA) has not, but the business decision both carriers would make is identical.
  • There should be a ban on all further Net Neutrality debates. This one, like many before it, never resolves the problem. Why? Because today, NO PROBLEM EXISTS. Don’t attempt to debate a fix for something that isn’t broke. Audiences seem to have an appetite for these debates, but the participants are always stuck debating hypothetical problems, and no one ever leaves satisfied.
  • Regardless, a great discussion. Lessig was virtually solo in his support of neutrality… he could have used an ally.

Lessig – Pro Net Neutrality. Supports tiers based on raw bandwidth, but not based on application. Digressed because of lack of any broadband policy. Not familiar with HR5252 Net Neutrality.

Paul – Hammering Lessig, need less regulation not more.

Gilder – More baffling legislation is the opposite direction of where we should be going. Wants people to make money on the network. Lawyers and professors should not be determining the future of the network. At last, money is starting to flood broadband. No evil conspiracy exists among the old baby bells. Wall St. already skeptical of investment in FTTH. More legislation will not help.

Huber – Smart guy. Always liked his Forbes articles. Vint Cerf supported tiered peering prices for access to the Internet backbone years ago. It was needed in order for the Internet to grow. The bottleneck used to be in the backbone. Lots of discussion of title 1 and 2 networks. Wish I knew the details of the differences. Huber highlights double standard of consumers being charged tiered bandwidth pricing but not being able to charge the same to providers on the other end. The value that carriers provide is the end to end connection, not the raw bandwidth. I thought that bringing up the fact Cerf supported the concept of tiered access in the backbone was ironic considering he is the big champion of net neutrality (Now that he works for Google? (GOOG)

Huber/Lessig tangling hard now. Lessig highlights YouTube as example of upstart that could not exist. Mobile networks are example of future if net neutrality is not enforced. Application innovation in mobile networks is a disaster. Huber continuing to talk about Title 1 or 2 connections. I need to get details on the differences.

Huber: Google, Ebay (EBAY), others use distributed data centers and Title 1 connections. Not all bits are equal from a value perspective why can’t people charge for them. That’s how networks will get built.

Gilder: If YouTube is doing so well then why do we need regulation?

Lessig – Keeps citing Gilders book with exact quote and page number. Sounds like a preacher citing the bible… a little creepy. 

Andy Kessler – Net Neutrality is the stupidest argument he has ever heard. Constructs entertaining argument about a town with only one gas station. Charge drivers different amounts based on what they do- hot rodders waste gas so they need to pay more, delivery trucks are reliant on gas so they should pay a premium. Thinks that more gas stations are the answer. Net Neutrality is stupid idea, and profiling applications won’t happen if there are enough gas stations.

Gilder – No freedoms will exist regardless of regulation if more broadband networks are not built. More regulation will complicate investment and demoralize investors in these networks.

Lessig – Two separate issues. 1. How do we get more broadband deployment. 2. How do we get more application development and competition. Does not support open access. Open access leads to more broadband penetration in most countries. Brief run off into the weeds about USA being 16th in broadband penetration (I think this whole debate is a myth!)

Cohen: Best example of a country without net neutrality is China. Applications are profiled and allowed/disallowed by the government. Do we want corporations to have this power?

Questions:

Netflix Guy – Are CDNs like Akamai violating network neutrality by providing better QoS?

Lessig – No, not a violation. Providing a valuable service.

Huber – if Net Neutrality is implemented, and Verizon gets into Akamai’s business, they would be violating the law. Makes no sense.

I apologize for any transcription errors. Please submit changes in the comments.

This post is one of a series as I blog the Gilder Telecosm 2006 conference. All posts can be found by searching for ‘Telecosm 2006’.

Discussion

Comments are disallowed for this post.

  1. Great coverage like always. It sounds like a lot of interesting stuff. I would almost agree that we don’t need net neutrality, excpet that the cablecos have been granted monopoly powers and consumers have no way to go to competition. In San Francisco, you either have Comcast or nothing if you want cable TV and cable broadband. If the market was open for anyone to come in and provide service, then I’d say let the open market sort it out, but to give the government the power to pick and choose which provider you have and then to let that provider discriminate as to which internet sites and services can connect to their system just doesn’t seem right.

    I disagree about it being an unwinnable argument, with the war chest that the cablecos and telcos have, they’ll easily buy off Congress and will maintain their government sponsored monopoly on our entertainment choices.

    Posted by Davis Freeberg | October 5, 2006, 6:19 PM
  2. Is he saying Title or Tier? Perhaps the discussion was about the large Tier 1 networks that don’t pay other networks to carry their traffic and smaller Teir 2 networks that pay.

    Posted by Nethead | October 6, 2006, 12:03 AM
  3. Davis- didn’t CA just pass a law allowing carriers to apply for a statewide license? Shouldn’t this drop regulatory barriers to new entrants?

    Nethead – It was most certainly Title. I have not had time to look into this.

    Posted by Andrew Schmitt | October 6, 2006, 9:13 AM
  4. Yes – The Governator just signed it into law and I’m am absolutely thrilled about this because I plan on ditching Comcast as soon as I can. I think this will do a lot to helping bring competition to the Bay Area where even Google is still fighting with our politicians to provide something as outrageous as free wifi for the citizens without paying for all kinds of pet projects.

    Nonetheless though, not every state is as progressive as California and I wouldn’t be surprised if the negotiations at the state level end up including forced HDTV for public access channels, even though they have the capabilites to just upload it to the internet and have nobody watch it there.

    Posted by davis freeberg | October 6, 2006, 9:38 PM
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