Thursday, April 27, 2006

"The Tony Soprano Model of Networking"

In a vote of 34 to 22, the House Committee on Energy & Commerce rejected a network neutrality amendment to the Communication, Promotion and Enhancement Act of 2006. This despite the fact that a bi-partisan groundswell of support for net neutrality has erupted literally overnight.

The coalition includes: Gun Owners of America, MoveOn Civic Action, Craig Newmark of Craigslist, Glenn Reynolds (aka ...Instapundit), Parents Television Council, United Church of Christ, the American Library Association, the Consumer Federation of America, Consumers Union, Common Cause, Public Knowledge, and other major public interest groups. The coalition is spearheaded by Free Press, a national, nonpartisan group focused on media reform and Internet policy issues...

"The diversity of this coalition underscores the importance of this issue," said Vint Cerf, one of the fathers of the Internet and Google's Chief Internet Evangelist. "When the Internet started, you didn't have to get permission to start companies. You just got on the Net and started your idea."

"It's shocking that the House continues to deny the will of the people on an issue that affects everyone so directly - protecting the free and open Internet," said Eli Pariser, Executive Director of Civic Action. "Our bipartisan coalition will rally the online community like it's never been rallied before, and together the public will overturn today's enormous blow to the freedom principle that's made the Internet great."

We need your help - so keep reading. Columbia University Professor Tim Wu weighed in with some devastating quotes yesterday:

"...Ninety-four percent of Americans have either zero, one or two choices for broadband access..."

Given the concentration of market power between the telcos and the cable companies, Wu said it was clear AT&T, Verizon, Comcast and other power players could make more money by distorting competition between Internet firms.

"It AT&T can, through implicit threats of degradation, extract a kind of protection money for those with the resources to pay up," Wu said. "It's basically the Tony Soprano model of networking, and while it makes sense for whoever is in a position to make threats, it isn't particularly good for the nation's economy, innovation or consumer welfare."

Wu also explained a little history -- why it's clear the carriers will, if permitted, distort, block and hamper any website that doesn't pay into their little protection racket:

The history... goes as far back as the 1860s, when Western Union, the telegraph monopolist, signed an exclusive deal with the Associated Press. Other wire services were priced-off the network - not blocked, but discriminated against. The result was to build Associated Press into a news monopoly that was not just dangerous for business, but dangerous for American democracy.

...“Western Union had exclusive contracts with the railroads; AP had exclusive contracts with Western Union; and individual newspapers had exclusive contracts with AP. These linkages made it difficult for rival news services to break in." The AP monopoly had an agenda: it didn’t just favor Google or Yahoo - it went as far as to chose politicians it liked and those it didn’t... AP used its Western Union-backed monopoly to influence politics in the late 19th century, even going so far as to exercise censorship on behalf of the State. The method was simple: when faced with messages from disfavored politicians, the wires simply didn’t carry them...

Think a world without network neutrality won't stifle Internet innovation? Think it doesn't endanger America's technology leadership position? It sounds like it's already starting to do so:

Pushing such regulation through will be difficult for the Internet companies, says Blair Levin, analyst with Stifel Nicolaus... "Right now, I would never invest in a business model that depended on protection from Net neutrality," says Levin.

Translation: I won't invest in an Internet startup. Only the big boys can afford the tarriffs.

The telcos don't want brilliant ideas like Skype, or Vonage, or Jajah to survive... they further endanger the telcos' dying, circa-1962 business models. That's why the carriers spend more on lobbyists than on innovative applications.

Go to Save the Internet now. Do your part to preserve Internet neutrality.

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