The Problem with Net Neutrality

Regarding FCC Chairman Julius Genachowski’s recent proposal to create a “Net neutrality” rule covering the broadband Internet, a few comments:

Let’s begin at the beginning: The Internet is not a single system. It’s a multitude of mostly private networks of varying capacity and speeds. True, they share the same basic software protocols but the networks have such fundamental differences (e.g., shared node vs. dedicated line, fiber optic vs. coaxial cable) that using the same label to describe them gives a misleading impression.

Second, there’s a big difference between Internet Protocol (IP) services, which often require end-to-end service over a Virtual Private Network (VPN), and applications run over the public Internet. For example, Net neutrality proponents often talk about how data sent over “the Internet” has always been equal. But VPNs have been offering fee-based services for 20 years that involve expediting data transmission.

This is a key distinction when applied to online video, especially IP television. From an engineering perspective, IP TV data cannot touch the public Internet and maintain quality comparable to cable or satellite. Even if the data spent only part of their transmission outside of the VPN, the quality would be fatally compromised.

That is why data for many time-sensitive applications (IP television, HD video streams) must travel over a dedicated network end-to-end.

That’s also why, from an economic perspective, it is a pretty radical concept for the FCC to consider regulating comparable treatment guarantees for multiple video streams! The Net neutrality concept implies that a competitor should have video service over the public Internet that is comparable to private network speed and quality. With the huge cost to deploy new technology, no ISP could afford to build that kind of a network.

More coming…

More Thoughts About Jody

Filed under: Asides,Jody Powell

(New York) A week has passed and the outpouring of fond reminiscences about Jody Powell continues. It should. From Sam Donaldson, we learned that Jody once poured a glass of red wine over his head in response to an ABC News segment. Did Jody have malice aforethought? Knowing Jody, there’s only one possible answer.

Personally, my favorite anecdote involving Jody happened on election night 1992: It was the loudest I ever heard him laugh. The networks had made a point of declaring that they wouldn’t predict a winner in the Presidential contest until the polls had closed in California. That was 10 PM EST. But at 9:30, Ross Perot came out and declared that Bill Clinton would be the next President. I was at the Powell Tate election party at the Willard in DC. There were about a dozen of us and Jody burst into the room laughing furiously and saying (approximately), “Did you just see how Ross stuck it to the networks?!?!”

Of course, there were the memorable “Jody-isms”:

“Getting pissed off is not a strategy.”

“Sometimes what the client thinks is a PR problem isn’t.”

“Don’t tell us what to say. Tell us what happened.”

When I joined Powell Tate in 1991, shortly after its founding, there were about 30 of us, of which perhaps five were red-state types. But to Jody, we were all part of the family. No question about it. When God made Jody, He broke the mold.

Jody Powell, R.I.P.

Filed under: Asides,Jody Powell

(Washington) My friend and mentor Jody Powell has passed on. In the coming days, the press will be filled with stories about how this thirty-something from Georgia revolutionized the role of White House press secretary. But leaving that aside, the real value of Jody was his willingness to treat everyone with whom he worked as part of his extended family. I joined Powell Tate in 1991 as one of its first hires (Thank you, Sheila Tate). I’d been at the company no more than a few weeks — and had met Jody only in passing — when he stopped me on my way out of the office one Friday evening and asked me to join him and his lovely wife Nan for dinner. It was the first of many such acts, not to mention his years of wise counsel. R.I.P., my mentor.

A Long & Winding Road

Filed under: Apple,Music Industry

(New York) Prior to Apple’s announcement yesterday about a revamped iPod line and new iTunes Store, speculation was rampant that the company would announce its long-awaited deal to put the Beatles on iTunes. ‘Twas not to be, alas. So nearly three years after Apple and Apple Corps Ltd. (the Beatles guardian) settled their long-running trademark suit, “Love Me Do” and “Eleanor Rigby” still aren’t available on the world’s most popular online music store.

For Apple Corps Ltd., this is a mistake on the order of General Howe sending his grenadiers up Breed’s Hill instead of sailing up the Mystic River. If the experience of the music industry during the last decade teaches anything, it’s that users can quickly get whatever songs they want. When the music industry makes it easy and legal (i.e., iTunes), they profit. When the industry digs in its heels, the loss of revenue is brutal as users flock to P2P and Limewire (or for old-fashioned types, there’s always passing around a CD).

That’s why Apple Corps Ltd will have only itself to blame as music revenues drop — with love, from me to you.

Net Neutrality Follies

The New York Times’ recent editorial on Net neutrality sets a new standard for dismaying ignorance about how the Net actually works. It posits that the Verizon-NARAL texting snafu is a reason to support Net neutrality. But that two-year-old issue involved Verizon’s refusal to grant NARAL a short code, which has nothing to do with network operations!

The Times’ editorial also suggests that without federal neutrality regulation, “Businesses could slow down or block their competitors’ Web content.” But as Hogan & Hartson’s Christopher Wolf, one of the nation’s premier Internet attorneys, demonstrated in a detailed analysis more than three years ago:

“If the hypothetical fears of those calling for regulated ‘net neutrality’ actually do come to pass in some fashion, there are legal remedies already available under existing laws and legal doctrine.”

These options include unfair competition law, antitrust law, and common law tort theories. Moreover, as the Supreme Court confirmed in its Brand X decision, Title I of the Communications Act of 1934 gives the FCC power to take regulatory action if presented with unfair business tactics by broadband providers.

The Times’ editorial on Net neutrality shows a gross misunderstanding of the law, network operations, and the precarious dynamic of funding for Internet deployment. Other than that, it’s tolerable.