The worst thing you could do to telephone regulation is to turn it into a state and local regulatory circus, which is what the FCC proposed to do last year, due to Kevin Martin's treachery. I have no idea what legal basis a court found for voiding that regulation, but George Gilder is now optimistic.
The future will see a fibersphere of all optical networks reaching around the globe and linked to customers by a variety of mostly wireless devices. In this radically simpler and more powerful network architecture, the only locality will be the distance reachable at the velocity of light, not at the speed of politics.
A couple of excerpts from his latest.
If Plan A is "Replace the phone system slowly and from within," Plan B is far more radical: "Replace the phone system. Period."
...Where Plan A is a fight between incumbent and upstart phone companies, Plan B says that we no more need a phone company than we need a text company.
...telephony is treated as a vice instead of an essential service -- the taxes and surcharges on a phone bill are more in line with the markup on alcohol and tobacco than with gas or air travel.
First, James Glassman wrote,
The law says that the Bells have "[t]he duty to provide, to any requesting telecommunications carrier for the provision of a telecommunications service, nondiscriminatory access to network elements on an unbundled basis at any technical feasible point on rates, terms and conditions that are just reasonable and nondiscriminatory" [Sect. 251 (c) (3)].UNE-P rates, set by state commissions, are certainly just and reasonable.
Glassman, Fein, and Norquist have asked the free-market movement to follow them down a path that essentially rejects free markets and instead embraces big government solutions. In light of the miserable failures of the post-Telecom Act regulatory regime, they need to rethink their support for infrastructure sharing and give free markets and real deregulation a chance.
Thanks in large part to AT&T refusing to open its own network to MCI and Sprint in 1984, Ma Bell was broken up by the Reagan Administration (hardly an Administration known for its devotion to government regulation) into AT&T long distance and the regional Bells. AT&T was required to lease its network to competitors, resulting in vigorous facilities-based competition in long distance today. And with that competition comes choices for the Bells.
If the Internet had existed in 1984, then the decision to force AT&T to lease its long-distance lines at regulated rates would have been wrong (Incidentally, I think that Wallop is wrong to imply that this was a Reagan Administration move--see this timeline.) The Internet would have been sufficient to enable competition in long-distance communication.
The idea that we need competition in something called telephone service is anachronistic. We need competition in what Bob Frankston calls connectivity. With connectivity, we do not need special regulatory regimes for voice bits as opposed to other bits.
Here's a dumb question. Why is voice over IP a business? I mean, email over IP is not a business. Web over IP is not a business. Video over IP is not a business. Why is voice over IP a business?
Clearly, some people think it's a business.
The company expects to have 1 million businesses and homes signed up by the end of 2005, said Cathy Martine, AT&T senior vice president of voice Internet services and consumer product management.
I mean, if you've developed a hack that routes voice bits to a telephone, then bully for you. But why don't you just sell me some equipment that takes advantage of that hack, rather than make me pay you $35 a month to use it?
Maybe AT&T's angle is a "quality of service" guarantee, using their proprietary network. Otherwise, I can't see getting the monthly fee to stick.
Thomas Hazlett offers a suggestion for avoiding smut.
During this high political season, you're likely to hear lots more about what lawmakers will do to protect your children. If you can, filter it out.
Stuart Minor Benjamin makes the case.
If spectrum were allocated in parcels of 100 megahertz, or even 200, there would be enough room for five or more competing abundant networks. In light of the benefits of competition, allowing for multiple networks seems to be
the wiser course.
The FCC takes a first stand on telephony over the Internet. They gave a very limited go-ahead, to "pure" VOIP (which does not connect to traditional phones).
Commissioner Michael Copps opposed the decision, and Jonathan Adelstein said he partially dissented.In a significant limitation, the decision does not address whether traditional phone regulations might apply to VoIP services that interconnect with the traditional telephone system.
I know I'm spitting into the wind to say this, but the supposed reason to regulate telephony in the first place is because it is allegedly a monopoly. Then, when it becomes competitive, the rationale for regulating the competitors is to make things "fair."
Logic would say that if regulate X because it's a monopoly, and then Y comes along and competes, the right answer isn't to regulate Y. It's to deregulate X. But logic isn't going to win here, is it?
According to this NY Times story, the homeland security types don't like the stupid network. The FCC is right to favor the stupid network, but I could see them being forced to buckle.
Law enforcement officials have also warned the F.C.C. that the approach that Mr. Powell has begun to articulate to have few regulations over the emerging technology that will permit consumers to use the Internet to send and receive phone calls could make it significantly more difficult for prosecutors and federal agents to monitor those calls.
My message to the FBI (not that anyone would listen to me) is that there are plenty of technological advances that make their job easier. Maybe it will be harder to tap phone conversations in the future, but get over it. The biggest problem for law enforcement is not voice over IP. It's internal bureaucratic stupidity.
My sympathies probably lie with Cato's Adam Thierer on policy issues, but I think that anytime you try to impute a position to your opponent you are on shaky grounds.
Here is Thierer.
Are markets and property rights really antithetical to openness, ideas, expression, knowledge, culture, diversity, and democracy? History shows that the exact opposite is the case. Markets and property rights have served as the foundation for those virtues. Indeed, and it is still the case today, cultures and nations that refuse to allow markets and property rights to develop have a lamentable track record on all of those fronts. History has shown, again and again, that the absence of property rights and free exchange leads to economic ruin, cultural stagnation, and political tyranny. It seems that the seductive charm of "the commons" is once again leading a large number of people to think a world without property rights is not only possible, but would somehow bring about a mythical cyber-nirvana.
But "the Internet" does not refer to a bunch of machines. It refers to the the set of protocols that enable a bunch of machines to link together in ways that no one -- including its inventors -- imagined. Technically, which in other cities means "accurately," that set of protocols is not "owned." Instead, the protocols of TCP/IP, which include the protocols for the World Wide Web, are in the public domain. I take it Cato believes that's a bad thing: That it would be better if those protocols were proprietary.
Andrew Odlyzko has a new paper, and as usual it's a must-read.
in telecommunications, the trend in general has been towards increasing simplicity. On the other hand, in transportation we find many instances of increasing sophistication in pricing, and almost a general principle of charging according to the value of the goods being moved (and thus without the end-to-end principle and without privacy). Thus those arguing for a new architecture for the Internet that would limit its opennes and ability to innovate do have numerous historical precedents on their side...
Open networks not only allow for greater innovation, but are more consistent with the likely evolution of telecommunications, towards a variety of technologies providing an interoperable network unified by the Internet Protocol, and with costs concentrated at the edges. They are also far more consistent with the nature of the demand for telecommunications. Hence it appears that there are good prospects for the preservation of an open architecture, although this is not a foregone conclusion.
A key distinction between the Internet and the transportation systems discussed earlier is that in transport, most of the costs were associated with the core of the network. On the Internet, on the other hand, the complexity, costs, and therefore revenue opportunities are largely at the edges.
En passant, Odlyzko writes
the main incentive for VoIP comes from the ability to get out of the elaborate maze of cross-subsidies, discriminatory pricing policies, and taxes that are built into the current telecom system. The question is whether the telecom industry can survive in the broadband era without another maze of cross-subsidies, discriminatory pricing policies, and taxes.
As usual with Odlyzko, read the whole thing.
Reader John Thacker points me to this great interview with Michael Powell.
If you're Vonage, a young IP (Internet protocol) telephony company, you don't have a 30-person regulatory shop in Washington. But Verizon does. And AT&T has 40 lawyers in Washington dedicated to regulatory issues.
The line that Thacker liked best:
I have no problem if a big and venerable company no longer exists tomorrow, as long as that value is transferred somewhere else in the economy.
I believe that the position of FCC chairman is the most important economic policy job outside of the Federal Reserve. I feel that we are blessed that Michael Powell has that job. I would rather have Powell at the FCC and the non-entities that Bush has appointed to head Treasury than have Reed Hundt at the FCC and Robert Rubin (for whom I have considerable respect) at Treasury. The FCC is more important, in my opinion.
Here's a white paper from the former FCC Chairman, on what he calls The Big Broadband Era.
The questions are not whether Big Broadband will swallow the fish, and perhaps the whole ocean, but how, when and by whom will the swallowing be done? Who will create value and who will capture it? How much capital will regulation and market failures cause to be wasted in the process? Lastly, will we include all Americans in the new medium, so as to create community and greater social value?
But what I really disagree with is Hundt's view of the technology. He writes as if the value of the Internet were in the pipes that carry bits. To me (and many others--I make no claim to orginality here), the beauty of the Internet is that the bits don't care who carries them. That's what "Internet" means, in some sense. And the value is not in the pipes--it's in the communication and content that occurs at the edges.
Most important, the pipes are more virtual than physical. Particularly if the last mile turns out to be wireless, which is what so many of us are now predicting. In that world, almost all of the questions posed in the paragraph I quoted would have no meaning whatsoever.
Reed Hundt is a scary person.
Is a no-hoper, according to Raymond L. Gifford.
More troubling, the FCC’s implementation of the ’96 Act has conferred regulatory duties on the states that cannot be performed well, perhaps not by any entity, but certainly not by the states...The FCC has directed the state commissions to price unbundled network elements using Total Element Long-Run Incremental Cost (TELRIC). TELRIC pricing is the epitome of what state commissions cannot do. Adopted by the FCC as part of its First Report and Order, which established the pricing methodology for unbundled network elements, TELRIC is a forward-looking pricing methodology that sets rates premised on the costs of an efficient, up-to-date incumbent, using commercially available technology...
Because the methodology is theoretical and forward-looking, there is more latitude respectively to inflate or minimize costs depending on a party’s interests. An incumbent local exchange carrier, seeking maximum cost recovery, will project forwardlooking efficient costs similar to its current, known costs because it wants to recover what it believes are its actual costs, even if they are in the future. Alternatively, a competitive local exchange carrier without its own facilities, will seek to minimize the costs on a future efficient network so that its cost of business is lower.
Thanks to Lynne Kiesling for the pointer.
My essay praising Michael Powell's approach at the FCC was published today in the Washington Times. It's the one where I concluded
Congress thinks it knows the optimal fraction of the television market that can be owned by one media firm. Reed Hundt thinks he knows better than consumers themselves how much they want to pay for fiber to their homes. Michael Copps thinks he knows how to manage phone lines and how to allocate spectrum.Unlike his detractors, Michael Powell thinks he knows less than the market. And in my view, that makes Michael Powell a man of rare and precious wisdom.
I went to this New America Foundation thingy on spectrum and DRM.
Kevin Werbach has a new paper, which I don't yet see on his web site, called "Radio Revolution." It's a good paper, and one of these days either the NewAmerica folks or somebody will have it up on the Web.
Kevin's case for a "commons" model is that the companies themselves will have to figure out how to build equipment that doesn't mess up the reception for other companies' equipment.
At this point, my technical ignorance kicks in. It sounds like creating a "highway commons" in which every vehicle manufacturer has to figure out how to keep its vehicle from endangering its competitor's vehicles. Maybe somebody, somewhere needs to set rules of the road--even if its a private owner of the highway. But maybe that's a lousy metaphor for this situation.
Another handout available today was James H. Johnston and J.H. Snider's advocacy of the wireless last mile.
Spectrum is not just a third last-mile broadband platform to compete with cable modems and DSL. It is the platform of choice.
I have taken this position myself, although I am totally ignorant about the state of play of the technology. I tried to press folks on this, including Kevin Kahn of Intel.
It seems to me that if the technology were here, then the regulatory barriers would be falling down, either to civil disobedience or to intense lobbying by the people who are ready to manufacture stuff for the new market. Kahn's comeback is that there is still a lot of research to be done, but some of the research requires access to spectrum, and in any case all of the research is risky if the regulatory environment is unclear.
Most importantly, he talks about a 5-year or 10-year time horizon for actually having cognitive radios ready for deployment. That sounds like a long time to me.
My current view is that technological uncertainty is more important than regulatory uncertainty at this point. It might be good policy for the FCC to open up another swath of spectrum to see what develops. But I don't think we know enough about what will work best to be able to be able to go beyond that in terms of resolving issues such as the question of whether a property model or a commons model is best.
From David Strom.
Vonage adds another feature to this list, which is having a phone number that you can transport with you around the world. All you need is a broadband IP connection and your Cisco router (your home phone number is tied to its MAC address). You go for a business trip someplace, and you can be making and receiving calls from your phone as if you were home. This comes in handy if you travel overseas and don't want to pay the usurious rates that hotels charge for international calls.
Bob Frankston wants television to get out of the way of the Internet.
One-way over-the-air broadcast is more than just a waste of time and effort. It perpetuates a disconnected underclass which can only watch TV but not participate. It undermines the goals of universal [service] and emphasizes the degree to which Congress seems to be unable to understand that bits are bits and TV bits are not special.
Thomas Hazlett says that it can be done.
In August, Berlin became the first place on earth to turn off its analog TV broadcasts. Viewers without digital receivers (priced between €88 and €279), or cable or satellite feeds, saw their TV screens go blank. Given that countries around the world are taking decades to make the analog-to-digital switch, the Berlin experience is extraordinary...While Berlin's TV stations were increasing to 27 from 12, the number of channels used to broadcasts these programs actually declined to seven from 12. Five channels, or 35MHz, worth of prime airspace, is now available to deliver new services.
Regulators in Berlin have yet to seize this opportunity, even as scores of wireless applications would die for a chance to use these valuable airwaves. In particular, high-speed wireless Internet access could compete with cable modems and digital-subscriber-line (DSL) technologies, promoting high-speed Internet deployment. The bandwidth could also be used to offer a competitive alternative to local phone service (through wireless voice service or voice-over-Internet offerings).
That's why I think that the solution is massive civil disobedience. If someone will manufacture it, buy wireless equipment that uses the TV spectrum.
I guess since everyone is linking to it, I have to. In fact, this new one from the Stanford Law School's finest is so bad, it really requires a Fisking. Let us begin.
Burlington, Vermont, is building a network. Like many municipalities across North America, it has decided to construct an advanced fiber network on its own.
If a traditional network provider owned an AFN in a particular area, that network provider, acting rationally, would charge customers a monopoly price, or restrict service to get its monopoly benefit. But if the customer owned the network, then the customer could get the same access at a much lower price and be free of use restrictions. McAdams is pushing - and Burlington and other cities are actually deploying - customer-owned AFNs.
Boeing, for example, has installed a massive AFN on its campuses. That AFN enables the company to offer itself extraordinary network capacity at extremely low cost. Technically, Boeing is the monopoly provider of network services to Boeing. But as McAdams nicely puts it (so nicely that we might call this the McAdams theorem), you don't monopolize yourself.
as more firms persuade more municipalities to develop competing high-speed networks, then we might learn again why GM doesn't own the highways, and why neither cable nor telecom companies should own IP access.
My guess is that what we will learn is that companies with good political connections will get the contracts to build these AFN's. They'll be like baseball stadiums--a great way for private interests to suck up taxpayer money and claim that it's for civic benefit.As for the example of owning highways--in fact with digital tolltaking we would be better off with private ownership. Highways would be better maintained, and traffic congestion would be better managed.
Finally, the solution to the last-mile problem isn't civic works projects. It's civil disobedience. Wireless networks using the spectrum now allocated to broadcast television would be an elegant solution. If somebody will develop the hardware, I'll help foment the rebellion.
Posted at 06:03 PM | Permalink | Comments (3) & TrackBacks (1) | Email this entry | Category: telecom, FCC
Sister Stirland asks about regulation of Cable TV.
Cooper argued that consumers ought to have more control over the content that they wish to receive (and thus more price flexibility.) Hazlett argued that it is inefficient to allow consumers to have more options when it comes to picking and choosing channels since the marginal cost of providing those programs to additional households is so low.
In the information age, bundling is a way of life, because--as Hazlett says--marginal costs are low.
--In my opinion, the music industry has to figure out how to do bundling. It's ridiculous to have people pay by-the-CD or by-the-song. People should be able to buy bundles. With the right bundle, the cost to the consumer of an additional download should be zero.
You would not want to regulate the music industry to force them to price by the CD. In fact, what the industry calls "protecting copyright" can be viewed as a form of regulation designed to enforce the by-the-CD business model and forestall competition based on bundling.
--The telephone industry tries all sorts of bundling. Few of us pay for cell phone minutes one at a time. Instead, we buy bundles.
Trying to regulate cable TV to sell service by-the-channel is like trying to help the music industry protect its business model with so-called copyright protection. It is like forcing cell phone companies to sell talk time by the minute. Yes, you can do those things, but it will raise cost for everyone.
Why did Kevin Martin break ranks with Michael Powell on the issue of whether the Baby Bells should be forced to lease their wires to other companies at government-mandated rates? Washington Monthly's Nicholas Confessore thinks he has the answer. He believes that it is the work of lobbyist-sponsored TechCentralStation and its founder, James Glassman.
Glassman certainly has impact. Earlier this year, the Federal Communications Commission considered whether regional Bell companies should continue to fully share their wires with competitors like AT&T--the position Democrats favored. The tiebreaking vote was cast by a conservative Bush appointee, Kevin Martin. Martin sided with his Democratic colleagues, a surprising position, but one made easier, say observers, by the fact that a few prominent conservative pundits, chief among them Glassman, had taken AT&T's side in the argument. "Glassman's clueless," opines an economist who specializes in telecom and supports relaxed regulations on both cable and phone systems. "But he gives good cover."
My head is spinning here. Michael Powell and the Republican who voted with him on the FCC were public-spirited angels, in Confessore's account. Glassman and Martin are corrupt, with their opinions bought and paid for. (Who bought the Democrats?)
Suppose that Martin had voted with Powell. I think that the chances are reasonably good that Washington Monthly or some similar publication would have been all over the Republicans for being bought and paid for by the Baby Bells.
My position on this is that I want both AT&T and the Baby Bells to lose. I think that the government's propensity to bail them out will be proportionate to its regulatory involvement, so I would not want to implement the price control regime needed to generate "competition" over local phone wires. So I would have voted with Powell. But it's a hold-your-nose, lesser-of-two-evils kind of position for me.
What troubles me is that Confessore's piece--muckraking or mudslinging, depending on one's point of view I suppose--is being used by Brad Delong and others to suggest that it is morally wrong to write for (or perhaps even to read) TCS. As someone who has written close to 100 essays for TCS over the past year-and-a-half, I have to disagree. Click on the "continue reading" for my thoughts.
I have been writing essays on technology, economics, and public policy since late 1997. TCS began to pick up my writing in 2002. Nick Schulz, the editor, is my contact with TCS.
As I said above, I saw Glassman speak in 1998 or 1999, but we did not meet. A couple of months ago, I went to a talk by Virginia Postrel, and Glassman introduced her. I introduced myself to him, and he said something like "Oh. I've seen your picture on articles on TCS." That is the extent of my personal contact with him.
I have opinions on a number of issues relevant to TCS sponsors. I take the Bjorn Lomborg view of the environment, which is congenial to TCS sponsors. I tend to defend Microsoft, which is a TCS sponsor, but almost everything I wrote on the subject was in my early, pre-TCS essays. I write about what interests me, and the Microsoft controversies interested me a lot more in 1998 than they do now.
My strongest sponsor-friendly essay was probably Quack Economic Prescription, which was a response to a physician's op-ed piece in The Washington Post in favor of drug price controls. I wrote the piece because I was outraged at the economic ignorance of the physician, and I wanted to expose it. My guess is that it pleased the drug company trade group that helps sponsor TCS, but that is certainly not why I wrote it. Which is worse--TCS publishing mainstream economic analysis because their sponsors agree with it, or the Post passing off economic nonsense as if it were informed opinion?
The impetus for writing "Quack Economic Prescription" was the Post. Nick Schulz never asked for the essay. I would have written it even if the only publication outlet had been my personal web site. If you want me to stop defending the drug companies, then tell the Post to stop running crappy, ignorant op-ed pieces attacking them. An intelligent, well-reasoned article would not have set me off.
If there is one essay on TCS that I wish other people would take to heart, it is my essay on Type M vs. type C arguments. There, I suggest that arguments should be evaluated on their merits, not on the basis of speculation about the motives of the person making them.
Confessore never looks at the merits of Glassman's position on telecom. Bloggers who disagree with TCS authors are jumping for joy at the excuse to ignore the substance of what we write, based on Confessore's "exposé."
God, does that tick me off. I have a hard enough time promoting my work as it is. I sincerely believe that it is much better than other economic writing that you see in the press. It is certainly ironic that a vicious type M hit piece is being used to discredit all my effort.
Sister Stirland landed an interview with Michael Powell, and she talked with some other interesting folks, including DeWayne Hendricks and David Isenberg. The topic is spectrum and the wireless Internet.
However much of an advocate for free markets and technology he is, Powell faces some pretty steep political obstacles.
If you need a Time magazine cover story to tell you about wireless, and you can put up with some really annoying ads, try this.
One of the sub-stories notes that there is a scarcity of spectrum in the WiFi band. I say, take it from the HDTV band. There is plenty there (scroll down to the previous post for more)
Lawrence Kotlikoff believes that he has found the formula for a Just Price for local telephone service.
TELRIC (Total Element Long Run Incremental Cost). TELRIC is the Supreme Court-approved methodology used by state regulators to determine leasing rates for Bell facilities. If the FCC TELRIC review forces state regulators to increase leasing rates, local voice competition will be history.
In my view, the idea of treating the local phone wires as a regulated resource to be re-sold by anyone who wants to set up a billing service is not helpful. It may be a bonanza for lawyers, but not for the public.
If you hate the local phone companies, then you should be rooting for them to be wiped out by wireless Internet, voice-over-IP, and other innovations. My prediction is that if we implement regulated competition in local phone service the way that Kotlikoff and others propose, then we will end up bailing out the Baby Bells, rather than leaving them to the fate of market forces.
I discuss FCC Chairman Michael Powell in the context of two Nobel Laureates.
By defending markets even when competition is messy, Powell is being Hayekian. Friedrich A. Hayek, awarded the Nobel Prize in economics in 1974, viewed Competition as a Discovery Procedure. He wrote, "market theory often prevents access to a true understanding of competition by proceeding from the assumption of a 'given' quantity of scarce goods. Which goods are scarce, however, or which things are goods, or how scarce or valuable they are, is precisely one of the conditions that competition should discover."Powell's opponents are Stiglitzian. Joseph Stiglitz, awarded the Nobel Prize in 2001, wrote, "But information economics does not agree with Hayek's assertion that markets act efficiently. The fact that markets with imperfect information do not work perfectly provides a rationale for potential government actions."
They want a broadcast flag to protect their precious content. We want spectrum to use to play with cognitive radio/wireless internet.
So how about a deal? The FCC should only grant the broadcast flag if the broadcasters agree to share their spectrum with the geeks. The technology for sharing the spectrum is called "underlay" by the FCC or "ghosting" by Bob Frankston. Hence, a ghost of a deal.
If it were done, would it have a ghost of a chance of helping push forward the wireless Internet?
That's what this guy says.
Skype is engaging in a fair fight. It's not stealing phone calls. It's just turning the Internet into a cheap and effective phone system that anyone can access. (And the sound is amazing: In full stereo, it's FM to your telephone's AM.) The biggest potential losers in all this are the descendants of Ma Bell—those regional local telephone companies that were spun off some two decades ago.
We don't get cable TV. I know that makes us weirdos (just ask my daughters), but it means that at the margin it would cost us a lot to get our Internet connection through cable.
My Verizon DSL account has been down for a *total* of less than 10 hours in two years. A lot of cable Internet users I've talked to would be thrilled to get through a week where they're only down for 10 hours.
I figured that my daughters would not want their own land lines when they got to college--they would be satisfied with cell phones. Wrong.
Look, I'm not bullish on the land-line phone business by any means. Even cell phones could look uneconomical if spread-spectrum technology breaks through the regulatory logjam. But I think that the process of blowing up legacy phone service will take longer than a decade--much longer.
I was disappointed to read that the FCC is going to try to change hardware to protect copyright.
Officials at the FCC, who spoke on the condition of anonymity, said they expect the agency to settle on details of the "broadcast flag" rule by the end of the month. The broadcast flag takes its name from the bit of computer code that would be embedded in digital television signals and would be read by "compliant" devices such as a television set or a digital video recorder.
The article quotes an official who expects a "clean majority" of the FCC to support this abomination. It would not surprise me to see Michael Copps, who is a (pardon my French) poseur's poseur par excellence, vote this way. But I had higher expectations for Michael Powell.
Remember the Democratic campaign cartoon that showed George Bush throwing an old woman out of a wheelchair? Michael Copps says that his opponents on the FCC are going to throw the Internet out of a wheelchair.
I am worried that we could be witnessing the beginning of the end of the Internet as we know it. And that maybe we will never experience the Internet as it might one day be... A lot of forces are converging out there, including not just new technologies that create opportunity but new technologies that facilitate closure and control. Economic policies that often seem to favor consolidation are converging with regulatory policies that eagerly pave the way. These are powerful currents. Our much vaunted digital migration could end far short of its destination.
There is not one shred of evidence in its favor. Once again, Michael Powell is right, and his critics are wrong. I feel sorry for Powell having to deal with the unsubstantiated demagoguery of someone like Copps.
Thomas Hazlett advocates taking spectrum away from traditional analog broadcast television.
According to the most recent figures from the National Cable Telecommunications Association, there are nearly 107 million U.S. TV households, of which about 94 million subscribe to cable or satellite. This leaves about 13 million households which would choose to: a) begin subscribing to cable; b) begin subscribing to satellite; c) buy a digital converter box; or d) use the TV set as a DVD display monitor.
Reason's Jeff Taylor sorts out the latest court opinions on Voice over Internet Protocol.
To recap, the law says your cable modem is a phone, except when you use it as a phone. Then it is not a phone.
Taylor has a longer piece analyzing the court ruling that forces the FCC to regulate cable companies more like phone companies. Everybody second-guesses Michael Powell when he tries to de-regulate. Why should the court be different?
You can really feel for FCC wonks in the wake of this decision. Here they are with a tidy little competition going on and here come the courts to foul it up. Of course, the lack of any open access mandate for cable guys looks unfair when the phone guys have one. But in the big picture the FCC knows that the phones guys already hold all the best cards, the ace being they already operate as telephone common-carriers.The phone companies would dearly love for every wired service under the sun to be found to be an Official Telephone Service, with all the heavy regulation that entails. That would mean the future of broadband would be hashed out under phone company house rules.
Read the whole thing.
On the topic of email spam, people periodically discover the solution of "sender pays," in which spammers are charged for sending unwanted email. Ian Ayres and Barry Nalebuff argue that telemarketers ought to pay for the privelege of calling you.
The classic role of government is to establish a system of property rights and then to get out of the way to let entitlement flow to highest valuers. But the Do Not Call registry needlessly prevents you from selling a scarce resource -- your time and attention. Telemarketers could call from a reverse 900 number. That way, you would get paid for taking the call...households that sign up for the Do Not Call registry should have the right to authorize their phone company to connect any calls that meet the household's price. Just think of it: You could charge different prices for different times of day or for different types of calls. You could even be given the option of hitting a button to waive the compensation -- because you felt that a particular charitable pitch was particularly worthy
Instead of the ersatz competition of shared local phone lines, I like this story.
She chose a wireless carrier, connecting the utility company's 20-person office to the Internet through a small rooftop dish antenna and bypassing the phone company's buried lines.Four years later, Otter Tail's connection is still wireless and now faster than a T-1 landline — at less than half the cost.
Kevin Werbach says that we don't need no stinkin' rules for using spectrum.
With advances in wireless technology, any set of rules that declares some forms of transmission acceptable and others unacceptable will be inefficient. Something that interferes today may not interfere tomorrow, as devices get smarter and more adaptive. So let's eliminate the rules, allow everyone to transmit however they wish, and use a liability system to deal with conflicts.
UPDATE: For a better reading on Werbach's ideas, see Regulate Hardware, not Ether.
The case for and against forcing the local Bells to share lines with competitors. Speaking for my side (con), Diane Katz says,
billions of investor dollars have instead flowed to Baby Bell wannabees whose business plans offer little more than a new billing address. The incumbents, meanwhile, saddled with 10,000 pages of access regulations...
