Wednesday’s Washington Examiner featured an Op Ed piece by Thomas Hazlett on the continuing saga of net neutrality. This discussion continues even today – if not every day, in some corner of the nation’s capitol – with a party line vote in the U.S. Senate of 52-46 declining to overturn the Federal Communications Commission’s (FCC’s) December 2010 ruling under the Congressional Review Act.
U.S. President Obama promised to veto the measure, had the Senate vote passed. Recall that a similar effort passed in the House to overturn the net neutrality, or “open Internet” order, which has also been appealed to federal courts, not once but twice, as Verizon’s previous appeal was turned down by the U.S. Court of Appeals for the D.C. Circuit on timeliness grounds.
This is timely, indeed, which is to say that the FCC’s open Internet order is part of a long struggle over how Internet traffic is delivered, and by which carriers and to whom, and what strings are attached. Mr. Hazlett’s opinion piece notes the decision made by successive FCC administrations in the earlier part of the last decade to resolve unbundling, or network sharing, obligations imposed on large incumbent telcos. These telcos, at the time, were late to the game in delivering broadband to consumers in the form of DSL.
The cable industry, subject to a different regulatory regime under the Telecommunications Act of 1996, had no such unbundling, or network sharing obligations, with competitors. However, cable operators did have an overhang involving “open access” in the Brand X decision, which the U.S. Supreme Court rejected in 2005. This set up the FCC’s decision in August of that year declining to impose “net neutrality” obligations on broadband providers.
Mr. Hazlett’s piece notes the rapid investment by telcos in DSL following a 2003 decision on network sharing. This was borne out byWednesday’s release of data by NTIA on broadband adoption in the U.S., with the number of consumers receiving broadband from cable pegged at 32 percent, and DSL at 23 percent. As to the bigger picture, whether DSL would have experienced the same deployment and adoption trajectory that it does today is unknown, because things didn’t turn out that way.
A memorable cover story from Barron’s on August 20, 2001 entitled: “Game Over” described how the cable industry had clobbered the telcos in the race to bring broadband to consumers; I recall executives from phone companies describe, at around the same time, the rapidly closing window of opportunity to provide broadband to consumers – the company I worked for at the time manufactured the equipment that would allow them to do so – but the telcos had regulatory concerns about deploying broadband in their networks.
What is known, however, is that consumer adoption, particularly on wireless devices including smartphones and tablets, has been nothing short of meteoric, as has been the rise of social networking and content sites. This is not just happening here, in the U.S., but on a global basis, as shown by China Daily USA’s article from the other day on the skyrocketing use of smartphones in that country by urban consumers, many of whom own more than one smartphone. (And these are not subsidized.)
The other piece in this puzzle involves ZTE’s plans on entering the tablet wars with a device of its own, challenging Apple and Amazon in the U.S. Other devices are manufactured overseas. Take a look at the back, or front, of your iPhone sometime (“Designed by Apple in California. Assembled in China.”) HTC makes devices for Verizon and other carriers, and so forth and so on.
Much of this is to Steve Jobs’ credit. Back in the day (2001 to 2002), I recall a comment at a coalition meeting about what kind of adoption numbers it would take to get Hollywood interested in broadband, and the suggestion offered was somewhere north of 25 million subscribers in the U.S. At the time, Napster effectively had been shut down, and the music industry was largely confused, and also reactive, about how to digitally package music so that it could be widely distributed, but also protected, for the benefit of copyright holders.
Enter the iPod, enter iTunes, the iPhone and iPad, and the rest is history, as they say. Which brings me to my final comment about the continuing influence of Mr. Jobs on these issues: Adobe has agreed to settle its long running dispute with Apple, over Flash, according to a piece in Thursday’s Wall Street Journal, with these comments by the late Mr. Jobs, about what was wrong with the picture:
The mobile era is about low-power devices, touch interfaces and open web standards—all areas where Flash falls short.’—Steve Jobs, April 2010
