[11911] in Commercialization & Privatization of the Internet
Re: Telecomm regulation
daemon@ATHENA.MIT.EDU (Stanton McCandlish)
Sun Apr 24 15:45:36 1994
From: Stanton McCandlish <mech@eff.org>
To: brodsky@radiomail.net (Ira Brodsky)
Date: Sun, 24 Apr 1994 13:55:19 -0400 (EDT)
Cc: com-priv@psi.com, frezza@radiomail.net, stahlman@radiomail.net,
mech@eff.org (Stanton McCandlish)
In-Reply-To: <199404211608.AA07702@radiomail.net> from "Ira Brodsky" at Apr 21, 94 09:08:26 am
> It all seems to boil down to two
> key points.
>
> You decry the mess regulation has
> created in telecomm, but you want to
> 'fix' it with... more regulation.
Less regulation actually. Some of them are new regulations, but we are
supporting the removal of a whole slew of regulatory burdens and hurdles.
The net effect is a reduction in regulation. The regulation we are
interested in is very minimal, and consists of only 2 things, boiled down:
stimulate competition in a morass-like market and reduce stagnating
regulation so the market recovers, and ensure that the NII, whatever it
will be, is a useful, real network, accessible to as many people as
possible, and with sufficient upstream bandwidth so that anyone can
provide content - decentralization is what we are talking about, all around.
> Don't you realise that everyone--
> even the regulators--claims to be in favor of 'streamlined' regulations
> with 'limited' objectives?
More or less. I think "claims to" is the key word though. I'm sure even
the FCC say that. I don't believe them, however.
> Regulation, by its very nature, can't
> restore competition. Competition is
> the ability to respond--in real time--
> to market dynamics and the actions of
> competitors. Regulation, in contrast,
> attempts to 'freeze frame' everything
> into the bureaucrats' idea of a 'fair'
> balance of forces.
I'll have to disagree here. I think some regulation is like that, but I
think regulation, as a whole, is increasingly becoming a dynamic force
itself. It HAS to change with the times, or it becomes hopelessly
obsolete, very quickly. I see the situation thusly: the infotainment
(incl. cable, phone, etc.) markets, all told, are burdened with a lot of
regulation. Some of it changes with the times (mostly that which is set
by executive branch agencies rather than congress, which is rather sad,
since we have no effective control over them), but some of it dates
back as far as 1934. THAT's the regulation that's crippling. The goal is
to get rid of that regulation, replace it, only where necessary, with more
dynamic regulation, and reduce even that over time. The less regulation
there is, the more competition there will be, particularly when the regs.
are designed to remove monopoly power and stimulate competition in a
market that hasn't known the meaning of the word in 60 years.
> Regulation in telecomm is guaranteed
> to be obsolete before the ink is dry. In the world of rapidly evolving
> technology, you can never create a
> balance of forces that can survive
> more than a few weeks.
That's why the regulation has to be pared off until it's gone, and the
normal market forces you described above come back into play. In a
better world, we could just delete all regulation and that would be that.
But I hope I've already adequately shown that this cannot be done in this
case, because it would result in market domination by the same monopolists
in power now. Their purely artificial market presence has to be reduced -
the air has to clear a little, before anyone can breath it again. Another
analogy: picture a car. It was a good car, and ran OK. Someone thought
it needed a tune up, though, and 100 mechanics took it apart. All that's
left is a bunch of pieces. The market/car is a heap of junk. If the
mechanics walk away, it never runs again. Instead, we have the mechanics
fix the mess they made. Each one of the regulation/mechanics (many of
them new, since it's time for a shift-change) reattach a piece of the car,
and leave. Pretty soon, we have an almost complete car, and only a
handful of mechanics left. Finally none, and a running car (we hope).
> Where you trust new, better regulation
> to 'fix' the mess created by regulation, I trust technology.
If the cards were not stacked in the favour of a small minority of the
players, namely those favoured with govt-propped monopoly all this time
(and this applies equally to monolithic telcos, and locally-monopolistic
small cable companies (more and more of which are owned by TCI these
days...), I'd agree with you.
> We
> can have competition in the local loop if wireless and Cable TV and long
> distance carriers and who-knows-who are free to just go to it. The govt.
> says
> it approves of this new reality (created by technological advances),
> but they respond by regulating Cable,
> quashing the AT&T-McCaw merger, and by creating a PCS with all sorts of
> eligibility restrictios, taxes disguised as auctions, and even an
> affirmative action program for divvying
> up the channels. (At this rate, PCS
> will be stillborn.)
Yes. This is precisely the kind of regulation no one wants to see.
Really, the new regs EFF called for are incredibly minimal, and really
only call for a few things: stimulate competition in a stagnant market,
provide infrastucture for the disenfranchised (some regard that as vaguely
socialistic; I've argued it until blue in the face, and all I can say is
that we just don't see it that way)*, ensure open access, open systems
design and 2-way structure. We are strongly supportive of moves to
reduce or eliminate other regs., thus our support of HR3636 and HR3626,
and misc. Senate bills.
[* This is NOT a proposal to subsidize access for the poor, any more than
POTS is a scheme to have taxes pay the phone bills of the poverty-stricken.
All we are asking for is that the infrastructure be there, that the cables
go to more places than the homes of the well-off.]
> Your views re: corporations are completely out of step with what has
> happened since the invention of the
> microprocessor. Large corporations
> are downsizing in every sense. All
> of the growth in jobs during the 80's
> was in small business. But not so
> in Europe, where the idea that
> corporations are evil and must be curbed has, ironically, led to a
> situation (as I predict it would here)
> in which there are precious few start-up firms.
I can't confirm or deny here, not being wise in the ways of Eur. commerce...
What I have seen in the press about this, though, suggests a boom in small
business growth there as here, especially in E. Eur.
> Guess what? Only the
> large corporations can afford to pay
> the taxes and provide the mandated
> 'human, caring' benefit programs. And only large corporations can afford to
> cultivate the industry-government
> alliance to ensure they are on the
> receiving end of govt. subsidies.
Who's calling for govt. subsidy? The only subsidy we'd like to see is for
schools, libraries, etc., which *will be subsidized anyway*. Nothing new
here. Who's calling for "'human, caring' benefit programs"? All we're
asking for is that the infrastructure be extended into rural and
poor-innercity areas. We're not even calling for govt subsidy of that,
but asking for commerical cross-subsidy. I have a suspicion that this too
would happen anyway - the farther the wires go, the more customers have
access, and customers pay money. Even if it costs a lot initiall, over
the next decade or 2 you make it all back and then some.
> Don't you see? This country already
> has the national info infrastructure, health care system, and
> consumer-oriented society that the rest of the world envies.
II yes, health care no. The US has a rapidly worsening health care system.
Last I looked, we have the 7th longest life expectancy avg. and 13th
lowest rate of infant mortality. I've seen other stats on success rates
for operations, etc. and they are just as bad. Sure, Bangladesh, etc.,
have worse health care systems, but in the "first world" countries, ours
is a joke. The Billary plan would of course worsen it. This is all
beside the point, though.
> The NII is
> an attempt to duplicate the govt.-knows-best policies that have failed
> miserably in Western
> Europe.
I'm not convinced of this. Mainly because most of the govts. of Europe
are far more socialist that ours. The NII EFF's been calling for is not
even similar. I can't speak for Gore, etc. of course.
> Why follow a bad model?
I don't think we are.
What would you have us do instead? I'm presuming you have different ideas
from Stahlman, so let's hear it.
--
Stanton McCandlish * mech@eff.org * Electronic Frontier Found. OnlineActivist
"In a Time/CNN poll of 1,000 Americans conducted last week by Yankelovich
Partners, two-thirds said it was more important to protect the privacy of
phone calls than to preserve the ability of police to conduct wiretaps.
When informed about the Clipper Chip, 80% said they opposed it."
- Philip Elmer-Dewitt, "Who Should Keep the Keys", TIME, Mar. 14 1994
