The GOP, Online Politics, and Internet Regulation

(cross-posted at Red State)

The Politico today has a column penned by David All, a young GOP internet consultant, and Saul Anuzis, Chairman of the Michigan GOP. The column looks at the premise that the GOP is behind its Democratic counterparts online, and suggests one possible reason why - we don't support the idea of big government intervention in regulating the Internet.

As Republicans, we must not only adopt the new techniques and structure of Internet democracy, but also understand the importance of preserving the open nature of the Net as a policy issue.The tools that are available at low cost to Republicans are only there because of an Internet ecosystem that has managed to remain open, despite the efforts of phone and cable companies.

Republicans need to adopt a lighter approach that will preserve the values of decentralization and freedom — essential conservative values — on the Internet. If we fail to engage in this effort, the Internet service providers, who control the last mile of the tubes into a customer’s house or small business, will choke off the affordable tools available to conservative activists.They have already started exercising their market power to block applications that enable Internet users to distribute information across the Net.

They will make the Internet look a lot more like cable TV, where citizens lack access to every legal channel available and where, consequently, conservative activists get shut out. Taking away these free tools will come at the major expense of the activists and small-businesspeople who are the core of our party’s strength.

Given the attacks on cable and telephone companies in this diatribe, it would be easy enough to discount any response from me as shilling on behalf of cable. Look at my bio, however, and you'll see that I may be the one person uniquely qualified to address every inaccuracy and outrageous claim in his post. Prior to coming to work in the cable industry, I was the eCampaign Director for Bush-Cheney '04, and the Republican National Committee. I've been involved in Republican politics - and online politics - since I launched one of the first state party websites (EVER) at the New Mexico GOP in 1995. At that time, there were only about 5 state parties online.

Since I have been active in GOP politics, and specifically online politics, since Andreesson released the browser in 1994, I have a bit to say about the reasons the GOP is behind (which virtually nobody argues). As an employee of the cable industry, I have a bit to say about what , if anything, that has to do with net neutrality.

 

The Cyclical Nature of Politics

To begin with, I, and many others, believe the GOP is behind online for the simple reason that it has never had to be ahead. When the GOP was previously in the minority it turned to talk radio to communicate and organize. In the early 1990s, talk radio was the most interactive medium and the party out of power generally gravitates to the best available method of message disbursement and organization.

In 2000, when the Democrats were out of power, they did the same and gravitated toward the Internet. The Republican Party still dominates talk radio, though the Democrats have been making inroads. Unfortunately, you can’t give money through your radio, so the media focused on the Internet and long ago stopped writing the "Why aren't Democrats on talk radio?" stories.

Just as there is nothing preventing Democrats from building an audience on talk radio, there is nothing preventing Republicans from achieving online. Now that we are in the minority in Congress and, if Obama wins, may be completely out of power, Republicans will look to rebuild using the tools that offer the most capability to interact and spread a message. They will eventually catch up to and surpass what the Democrats are doing. That's the cyclical nature of politics.

But What Does Net Neutrality Have to Do With This?

The short answer is absolutely nothing. But David is part of a group called Internet For Everyone whose founders have suggested nationalization of the Internet. The list of his coalition partners reads like a who's who of the left. ACLU, ACORN, Care2, NOW and SEIU are just a few of the far left groups signed on to the project. David and his two web properties - SlateCard and Techrepublican - appear to be the only GOP organizations onboard with the project.

To his specific claim, it is simply absurd to make the suggestion that Republicans are behind because there is no national broadband solution. David might as well argue that the GOP is behind because the government hasn't bought everyone a car. The two are just as closely related.

David, like most people arguing for Net Neutrality likes to throw out numbers that seem to support his point.

America’s rural voters are largely Republican. Yet they face major challenges in gaining access to a broadband Internet connection. The latest U.S. Census data show that only 39 percent of rural households subscribe to broadband — and nearly 10 million rural households are in areas not served by any broadband provider.

These figures come from an Internet for Everyone document, which cites a 2007 Current Population Survey (CPS) of the U.S. Census Bureau.  There is a document available on the NTIA website that provides statistics from the CPS. According to the CPS, 39% of rural households did respond that they have broadband service, but 19% also said they have dial-up, and another 10% responded that they access the Internet outside of their home.  Thus 68% of rural households access the Internet according to the CPS survey.  The figures for urban households, the only other category, were 54% broadband, 9% dial-up, and 9% outside of the home, for a total of 72%.  The spread between rural and urban households is only 4%, hardly qualifying as a great divide, or leaving the poor rural folks behind.

Neither the NTIA site nor the CPS study address the 10 million households claim. The 10 million figure may be arrived at by referring to the number of housing units not passed by cable broadband service, according to estimates provided by SNL Kagan - a media research firm. Kagan found that 10 million households, not rural households, don't have access to cable broadband - not broadband at all, which is what David claims . Simply put, not all of these people live in rural areas. For instance, some areas in Montgomery County, Maryland - a suburb of Washington DC, are unserved by cable, but that is hardly a "rural" area. Moreover, some of those are served by telephone company broadband service - as in Montgomery County. There are suburban or exurban communities that cable doesn't serve, for one reason or another.

David also fails to note that the cable broadband he denigrates was a) built with $130 billion in private capital, not government subsidies, and b) was built without the burden of government regulation that hampered development of DSL. It was the lack of regulation and the investment of private funds that created the platform we rely on for high bandwidth applications. The cable system that serves 92% of Americans with broadband was built under a system identical to the current regulatory regime, not under the 'good old days' of common carrier and forced access.

It's worth noting, by comparison, that the telephone companies sat on DSL technology for more than a decade while under the exact regulatory regime the IFE folks are now promoting. There was simply no incentive to invest in a network technology they could not monetize and see returns on the initial outlay. Now that they have been freed of such regulations, the telephone companies are aggressively building a $100+ billion Fiber to the Home networkto compete with cable.

Since David's whole argument hinges on getting rural, Republican voters connected, it's important to note that he got his central supporting facts wrong with regard to the current status of rural broadband. David made the same arguments in a Washington Times video interview posted yesterday (in which he conveniently rounds the number of Americans without a broadband connection down to 50%, despite many current estimates which place the figure at between 42% and 45% and likely to drop to 40% when numbers are compiled for the second quarter of 2008).

Since he has a habit of misstating facts and figures, one must ask if he is uninformed or intentionally misquoting numbers to justify his thesis. My belief is the former, but I still have some suspicion it may be the latter.

Further Pandering

Part of the reason I believe David may simply be desperate to make his case and willing to clutch at straws is the way he characterized the AP “research” into the Comcast/BitTorrent issue.

For example, Comcast was caught red-handed by The Associated Press blocking the distribution of the King James Bible. Martin launched an investigation and convened public hearings that put Comcast in the hot seat.

That is an absolutely false characterization of what happened. The Comcast/BitTorrent flap was a matter of Comcast trying to guarantee the best possible experience for the vast majority of its users, and trying to restrict the impact that heavy users of P2P applications have on broadband networks.

David implies that a) Comcast was aware the content the AP used in its test was the King James Bible and b) specifically targeted that traffic. Why would he make such outrageous claims to make his case? Because David is trying to convince Republicans to support his cause, and Republicans identify strongly with issues of faith. By claiming "the big bad cable company tried to stop you from seeing the bible" he's pandering in the worst possible way.

As a Republican

As a Republican, I would be skeptical of Internet regulation on the best day, and downright hostile on any other. I do not believe the imposition of a new regulatroy regime is the cure to the perceived ills of either the state of broadband or the state of my party.  As someone who has been thinking of ways for Republicans to use the Internet for almost fifteen years, I disagree completely with David's ridiculous claim that the only way to save the party is to create a new bureaucracy to regulate the Internet.

While I respect David's opinion and right to speak out on whatever topic he chooses, I firmly believe he could not be further off track on this issue.  I also hope he will take the time to address my deconstruction of his argument and answer my challenge to the factual basis of his column. He may perhaps become informed about the subject matter rather than irresponsibly disseminating mistruths.

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Comments

Is this like the CT problem

where yuppies from NYC move deep into some mountain hollow, and then demand someone provide them with the same cheap broadband access they had on East 73rd Street?

http://cache.search.yahoo-ht2.akadns.net/search/cache?ei=UTF-8&p=%22Connecticut%22%22broadband%22%22Roraback%22&y=Search&fr=yfp-t-501&u=fox61.trb.com/news/local/hc-nobroadband0418.artapr18%2C0%2C1251039.story&w=connecticut+broadband+roraback&d=IHaH6S72Q9Ag&icp=1&.intl=us

Needless to say, a RINO is taking up their cause. 

 "Another idea that's been discussed is adding a onetime charge of a few dollars on the bills of high-speed Internet customers to pay the cost of connecting the last few households, said state Sen. Andrew Roraback, R-Goshen.

But he said there has been resistance to that idea by people who think — incorrectly, in Roraback's view — that the charge is a subsidy for wealthy New Yorkers. Roraback said it's more an issue of fairness and promotion of economic development in a part of the state where residents have a wide variety of incomes."
 

Perhaps the Republican party ought to consider the vast majority of its potential voters are suburban working stiffs, who always catch the brunt of these sneaky little subsidies for folks who can't or won't pay the freight.

  

Michael Turk is correct.

As much as I would love faster and cheaper broadband connectivity, I don't see how getting the government involved will accomplish it, not without dreadful side effects anyway. The idea is certainly laudable, as most liberal ideas are, but the end result would be just another redistribution of wealth scheme undertaken by the government at my expense.

If implemented, the first thing you know, we will be asked to pay a small adjustment tax to our broadband monthly fee in order to reach all of those out-of-area households, and then an additional extra fee to pay for all those poor households who can't afford to pay for any broadband at all.  No thanks...I think we should stick to the free market system to protect every body's right to access this powerful communicative tool.

Great presentation, by the way, Mr. Turk. By presenting both sides of the issue, the decision-makers can make their own informed choice.

I look forward to any rebuttal argument David All or Saul Anuzis might want to make in this regard.

ex animo

davidfarrar

Not exactly...it's NOT that simple

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This week I co-authored an article about “net neutrality” or “Open Internet” as others call it, with GOP Internet consultant David All.  The op-ed piece was published in POLITICO and you can read it here:

http://www.politico.com/news/stories/0708/11734.html

Michael Turk raise some issues that I wanted to address.  It’s not as simple as he would like to make it sound.

I don’t want to engage in a long debate over this, as I’ve been involved in this issue and telecom competition here in Michigan over the last 20 years.

Professor Gary Wolfram of Hillsdale College (the home of the Von Mises Institute) wrote a series of papers and article during the telecom debate here in Michigan which discussed the role of government when you “privatize” someone with government granted “monopoly” status.

This debate usually comes down to the question of the “last mile.” While we have come a long way toward opening up access is some ways, the overwhelming majority of people still get their access through their local incumbent telco provider or a franchise cable company.

I have attached a number of Professor Wolfram’s articles that go into great detail about some of the market challenges we face over competition and the last mile, which directly relates to “net neutrality.”  Professor Wolfram summarizes it well here:

“There is general agreement from all sides of the issue that the telecommunications industry would be best served by a competitive market.  The issue of creating a competitive local phone service system is much like the question of how to move Russia from a centrally planned economic system to a competitive one.  As with the latter, the debate is in the transition strategy not in the ultimate desired outcome.  Some free market proponents argue that immediate deregulation is the best method of getting to the optimal state and that the current system of requiring local telecommunications firms to allow access to their networks is either a violation of property rights or is the equivalent of government setting prices.  While this appears to be a strong argument, it is in fact seriously flawed for at least two reasons.  First, the four companies that own the bulk of the local network in the United States effectively became monopoly providers through the political process, not by being the most efficient provider in a competitive market.   Second, the current process of requiring incumbent local phone companies to allow access to the network is not a form of price-fixing, but rather an attempt to allow use of the network at a price that reflects the cost of providing the network to competitors.  It is more likely that the current Michigan Public Service Commission requirements that provide access to the network will result in a competitive market than would elimination of all regulation in a situation of monopoly control of the infrastructure.

“The result of removing government from the process of moving to competition would be to remonopolize the phone industry over the next decade.  Using their advantage of control of the infrastructure the incumbents such as SBC would be able to eliminate competition for not just local but also for long distance and Internet.  We have already seen the steady consolidation of local phone providers and the financial difficulties of the long distance companies, and Internet providers   It will become increasing difficult for competitors to obtain capital to upgrade their systems or to attempt to build a parallel network. “

You can read his complete text in the attached documents. 

The idea on phone service was that the phone companies built out the infrastructure under the institution of government granted monopoly.  This gave them a "choke point" in getting access to your house.  If they did not sell a competing service, that would be OK, that is structural separation, where they only sold access.  In this case they would not have an incentive to discriminate against local or long distance or Internet providers. 

Because they sold local service, they did have an incentive to not let others who also sell local services access to your house.  It is also very clear that there is a big advantage in being able to bundle services.  Thus, once local phone companies could sell long distance they began to further consolidate.  They then began to take over the wireless and IP markets.  The question is how to relate this to cable and Internet access.  The argument would have to be that cable companies gained access to your house through a similar process as local phone--government granted monopoly access.  Once they are able to sell Internet service, you get the same argument.  If cable companies were given monopoly access to your house by government, and they sell Internet services, then they will not have incentive to grant access to competitors.  This implies that if a company was granted monopoly access to your house, it should be required to allow competitors this access at the marginal cost of doing so, with perhaps a fee to offset the fixed cost of installing the infrastructure.

So one way to ensure and stregthen competition and open access is to guarantee “net neutrality.”

Another good article worth reading would be The Meaning of Competition by Hayek.  This is NOT a simple free market vs government intervention argument.  This is not, nor should it be, a partisan issue.

I hope this helps clarify my position, for those who care J

Please head over to my original post on my blog to see the original Wolfram documents and attachments:

http://migop.blogs.com/blog/2008/07/net-neutralityc.html

 

 

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That would be great and all, but...

You are comparing telephone companies that were built using government subsidies and cable companies that were built using private capital.  You are also comparing telephone companies that operated until recently under the common carrier regulations and cable companies that never did.

At the time of deregulation, cable (absent those government subsidies and regulations) had garnered about 65% of the market.  The telcos, in the meantime, sat on DSL for over a decade.  There was simply no incentive to invest in the new technology if they were forced to sell it to others at less than cost.

Since the deregulation of broadband, the telcos have begun the rollout of fiber to the home and expect to spend north of $200 billion dollars building new infrastructure.  they could have done that during the period between 1996 and 2005 (as cable did), but, again, had no incentive because they were prevented from monetizing the network and recovering the costs.

If you want to look at the role of regulation in the telecom space, and specifically in broadband, you need look no further than which regime stifled innovation and investment and which encouraged it.

yeh, but...

 Every cable "franchise" was granted by local units of government.

So although they used "private capital" they still had at a minimum oligopoly status.

I'm not arguing for broad regulation or anything like that...but if a consumer buys the broadband, he should be able to use it as they wish.

The similarity is based on the fact that both 'control' the last mile.

As they wish...

I'm not arguing for broad regulation or anything like that...but if a consumer buys the broadband, he should be able to use it as they wish.

Unless they use it to the detriment of others who have also bought the broadband.  Since you're talking about shared node networks, your habits impact the experience of others. 

Take the Comcast/BitTorrent case, for example.  Comcast adopted what it thought was a reasonable approach.  They attempted to target those whose use of the network was impeding the use of others.  That's largely the nature of P2P and has been since the days of Napster, LimeWire and Kazaa.

If you recall those applications, the display of tunes you searched included columns for the connection speed of the host computer (cable/dsl/dial-up) and a meter showing how backed up they were.  P2P looks to find the connection with the highest available bandwidth to consume as much of it as possible.

If you share a node with other homes, that means your use of P2P interferes with my VoIP call or streaming video.  ISPs are testing a wide variety of network management protocols to see what works.  In the case of Comcast, the market spoke, the ISP listened, and is now a) no longer targeting based on applications but based on high-bandwidth users, and b) working with P2P application providers to make their use of bandwidth more efficient.  All of that was done without government and in response to market forces.

That's how it needs to work.

I don't want Congressmen who barely understand the Internet (or never ever use it - cough, cough, John McCain, cough, cough) picking the network management protocols ISPs should use.  They're simply not qualified to do so.

With regard to local franchises, anyone could have applied for and received those (and did).  People talk about cable as if it's one company, but the fact is there are a large number of cable companies operating in every corner of America.  There are about 40 in West Virginia alone.

You can complain about the alleged "monopoly" or the "duopoly" but the only thing preventing any competitor who wants to enter the market from doing so is capital.  They can negotiate franchises with local authorities and provide service the way cable and telcos have.   Thus the problem with your approach.  If you take away any ability to monetize the network and make a profit on different business models, you take away the incentive to enter the market at all. 

I agree...

However, being "net neutral" would not interfere with any new technology, it would just prohibit "chocking" off competitive services or offerings.

 

Your Totally Right

In the end these companies are just more concerned with protecting their bottomline. Check out some conversation on internet regulation and more at http://web.illish.us .

Therein lies your problem...

I would bet that if you asked 19 people in this community to define net neutrality, you'd get at least 21 different answers.

What you call net neutrality is the prohibition on one company promoting a site or service over another.  What Ron Wyden calls net neutrality is "dumb pipes" that prevent prioritization of VoIP and video traffic ahead of e-mail. I've heard about three dozen other definitions from outright nationalization to "forcing the cable and telcos to sell their network to third parties".

The minute you can get your coalition to agree on what they want, we can have a serious discussion.  If you keep shifting goal posts, it's never going to happen.

Your solution of making government the arbiter is ripe for disaster.  Anyone who knows anything about networks understands that some degree of network management is required to guarantee quality of service.  Do you really want the government to be the arbiter of what methods are "approved" and which aren't?  That simply opens the door to corruption.  If getting on the "approved" list means hundreds of millions of dollars and being "disapproved" means squat, you're just asking for more Duke Cunninghams and William Jeffersons.

No thanks.

Okay, gentlemen...I have heard your arguments...

...in the "Net Neutrality "case and I am prepared to make a decision.

First let me congratulate you both on your fine presentations.

The Court finds: Petitioner's case is premature at this time. The predicate for government intervention has not been established by the testimony presented. 

The Court further finds that Congress can always institute governmental regulation into the marketplace when private providers fail in their responsibilities, but experience has shown the Court, once engaged, it is very, very difficult to get government out of an industry and to mitigate its influences.

The Court finds for the Respondent, Michael Turk.

ex animo

davidfarrar

Glad this is a post-partisan issue

Lefty here. Very happy about the lack of Obama is a muslim/black nationalist/related tripe here as opposed to Free Republic. Keep it up.

I'm really, really glad that we all recognize how important network neutrality is. I'm not in favor of dumb pipes necessarily, but I think Comcast's attempts to predict and control the protocols that will be operating on their network is totally futile.

What makes the internet great is the fact that it is a disruptive technology. Today's killer app is tomorrow's garbage, and we know that top-down marketing doesn't work on the internet. I don't think VOIP sold by telecoms is going to go anywhere- it's a little like Real Networks insisting that their "TV on the Internet" was going to be a blockbuster, only to fizzle later.

The service that will attract the most business will be the one that does the job best, and it will be the next "troublesome protocol", like BitTorrent, that entities like Comcast will attempt to stamp out in favor of the one they're trying to make money on. "Prioritizing" their own VOIP system and leaving, say, Skype, to compete with all of the other traffic, is no different than letting Yahoo load faster than Google.