Regulators now regulating Internet History? Really?

Mon Jun 8 10:56:46 UTC 2015

On Mon, Jun 8, 2015 at 6:01 AM, Larry Sheldon <larrysheldon at cox.net> wrote:

> Looks to me that there are issues of interest here.
>
>
> http://www.aei.org/publication/tom-wheeler-tries-to-rewrite-internet-history/

This isn't a very good article.

At best, it is a set of unsubstantiated claims regarding events of
undefined correlation. "Change in regulation Y led to less investment in
[bad sector] and more investment in [good sector]." Really? Details of how
much more? How much less? Why was this better? How did you measure that?
There are only vague figures without attribution and no establishment of
causal link. The assumption is just made that investment decisions are made
for regulatory reasons. This is particularly suspect because, as you may
recall, there were other things going on in that period. Like the Internet
Bubble.

The timeline of events is screwed with. He uses the period between 1996 and
2000, when the Internet Bubble popped, and compares it to 1996 to 2005,
when Powell/Martin did away with pro-competitive regulation. Yes, during
the bubble, which ended in 2000, there was a huge investment in fiber, but
it is a difficult argument to make that the investment was because of
regulation since the regulatory change happened in 2005. If it was the
regulatory change, why didn't investment happen during the missing five
years? Since it is a widely held thesis that the fiber bubble popped
because of a huge oversupply of dark fiber, why is that not directly
addressed.

Yes, after 2005 cable companies invested in broadband, but again that
market wasn't technologically developed yet in say, 1999. Further, how can
you focus only the rate of change in cable investment without considering
the rate of change in DSL?

Claiming the Internet bubble popped because of a change in telco regulatory
regime in the US is ridiculous, as is ignoring the effect of underlying
technology on the appearance and disappearance of markets. Regulators,
lawyers and politicians need to get over themselves and have a measured
perspective on their importance.

The argument that killing competition from the CLECs led to more investment
and a better network is a difficult one to make. Particularly during a
period where the US's network lost is speed/quality advantage compared to
other advanced countries. There is a strong set of opinions that killing
CLEC competition was retardant on network speed/quality growth. I don't see
how articles like this are going to change minds.

Disclaimer: I am a computer scientist. In general, I find public policy
arguments deeply annoying because they have flaws similar to the above.

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Fletcher Kittredge
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