A Conversation with Bob Frankston, Inventor of VisiCalc, Internet Legend ...

Bob & I have been discussing the Internet, law, technology, economics and policy on closed email lists for years. Bob's a good friend and someone I greatly respect. He's also someone who has influenced my thinking greatly. Recently, in response to controversies over Net Neutrality, Bob and I got to conversing about how to fix things.

Here's my response to a recent post from Bob's blog: Conversation with Erik Cecil on Net Neutrality

Bob,

I couldn't agree more with you. We've been funding the network of 1945 for years now while Verizon and AT&T build their own network of the future, locked down, walled off and dribbling out innovation on their terms, not ours. It is the greatest irony of regulation for the public that the public has no idea how regulation works, no idea that they are paying to rebuild monopolies that turn around and suck them dry of every possible cent in the name of preserving services even the networks admit are done and gone.

Between the present walled gardens where law and regulation is used to disable human achievement and innovation and a world where glass is simply what it is - a utility input - lies the question of how best to enable individual human beings. Because the Internet turns the telephone network inside and out, so too must we turn regulation inside out and give to individuals all of the rights of common carriers because, in all honesty, "common carriage" as a business, as a middle, is irrelevant to the value of networks. Rather, what is needed are massive, neutral network operators wise enough to spend their time, effort and money empowering individuals rather than inventing new ways to restrict innovation that they may dribble it out a bit at a time to a public and a technological world capable of innovation on scales that these entities are actually terrified to consider.

Voice and channel vendors are, as a business and value proposition, dead. One knows this from reading their 10Ks, 10Qs and comments on file with the FCC. But going to bit vendor, which is precisely where Net Neutrality is going to put us, is not the answer either. As an interim step, however, we can at least declare all IP to be common carriage (we already do in many realms - CMRS providers, for example, can provide "non-telecommunications", including IP, but it is treated as "common carriage" and thus "telecommunications" nonetheless. (Were this not the case, then no CMRS network - AT&T, Verizon, TMO, Sprint, etc. could interconnect with another at cost-based rates per Sections 251/2 of the Telecom Act as they are deploying 4G / LTE / WiMax, and other technologies that are entirely not telecommunications in ancient legal views under which we must still live).

Unless and until we free the FCC from the moorings of serving "industry" so that it may serve individuals; unless and until we free ourselves from ancient conceptualizations of how to fund and deploy computer networks that also happen to provide voice functionality, we're going to continue to pour billions of dollars down the greedy gullets of giant networks whose main objective is value extraction. In 2008-2009 the largest incumbent telephone carriers saw ROIs of 100%, which, in this day and age is nothing short of the obscenity we've seen with the worst of Wall Street excesses. Yet it continues unabated.

Let's hope the world wakes up.

***for more on Bob's thinking, check Debi Jone's blog, Mobile Jones: "It's Infrastructure, Stupid"

The Fathers of the Internet on Your Future - Bennett, Farber, Jackson, Peha before Congress

First, I'd like to thank Richard Bennett for the shout out and recognition on Cybertlecom. You can read Richard's blog here: http://bennett.com/blog/

Second, this video is one of the better discussions of Internet law and policy I've seen in a long time. It was on point, honest, and detailed. Richard, like myself, suggests focusing on the Internet of the Future. This is something that Richard, Dave Farber, Chuck Jackson, and Jon Peha covered in a very rich discussion that occurred recently on Capitol Hill.

Third, having spent the first half of my professional career enabling as a lawyer the technologies these magicians brought into the world, I'd like to pick up on their thoughts and provide a further legal / regulatory perspective:

"Simplicity is a virtue too" - Chuck Jackson.

I think you are correct to point out the need for a more reasonable discussion around Net Neutrality. At bottom we need to begin to agree to what it is the problem we are solving. From your presentation and discussion before the US House of Representatives and in other places, I gather your concern, like mine, is that today's regulatory regime is strangling Internet innovation. It seems as if the law has been made the enemy of every law we love from Metcalf to Reed. From where I sit, it is as if each and every thing that touches any incumbent LEC must reverse engineer itself in terms of technology and economy to pay for network configurations and services that were already well on their way to becoming ancient in the 1980s. It is only very recently that most of the class 5 switches in this country were upgraded to being LNP capable, which, honestly, is insane. Yet we have subsidized it and continue to subsidize this system to the tune of billions of dollars not to mention hundreds of billions of lost market value and innovation that gets crushed beneath the slow moving tractor treads of incumbent telco plus state and federal law that has zero conception of fiber optic, ubiquitous computing power, cloud environments, optical switching, and open source.

Accordingly, to be an enemy of Net Neutrality is to be a friend of the Internet and innovation. Net Neutrality sets us up for a massive fall into moving from the pay per call, per mile, per minute world that didn't work in 1983, has zero relevance today but remains as insidious as it is pervasive into an even more regressive and disabling world where we will pay per bit, if not pay per thought. Arguably, given the incredible conflicts between those who "own" "content" and those who "don't own it", adding to that befuddled and regressive dynamic a world where those who'd have you pay for the infrastructure 10 billion times over on a per bit basis, and what you have is complete disaster.

All that said, what you want, what I want, what the FCC really wants, and ultimately what AT&T, Verizon, Google, Cisco, Apple, HP, and any and every network (regardless of layer) want is a world where we fund and construct the best, most open network possible: wide open fiber optic to the premises while enabling competition that matters to people. Voice is not it. Voice is an application, and that's an overstatement. People value intelligence; they value devices, software, connectivity, and interactivity that help them make sense of their world. They will pay a king's ransom for things like iPhones or apps, not voice, not copper, not minutes and not miles.

Accordingly, a giant problem with Net Neutrality is that we continue to fund a scarcity model in the physical network plant, are faced with a host of problems within the IP and layers above, while we are trying to use law to make an IP network behave like lower layer transport network without paying to upgrade all network plant. Yet, not only to we continue to fund monopoly copper endlessly, we turn the other way when state regulators affirmatively cross subsidize deregulated Bellco plant while incumbent landline carriers cherry pick the networks they haven't driven out of business and dump the ones from which further subsidy harvesting is no longer profitable enough. That we struggle to make any technology work, much less make the entire Internet work in this environment, should come as no surprise. That we cannot agree what non-discrimination should mean is beyond question as the results of getting that requirement wrong, relative to network, technology employed, location, time, and a billion other variables can, will, and have mean the complete financial destruction of advanced networks primarily at the hands of state regulators (while federal regulators hide behind complexity in order to eschew responsibility for such destructive results).

Were we to start at the physical layer, define rational objectives there; divest ourselves of the irrelevant silos of the past (i.e. "mobile wireless" "telephone" "cable" "satellite" etc.), and think in terms of what nations worldwide see as simply pure connectivity, we can and will unleash and enable innovation on a scale that I personally believe would take the downward trending log curve of money invested in copper, minutes, cores, etc. and reinvigorate and revitalize interactive environments of value in ways we cannot even dream of today.

Yet, if we insist upon maintaining the illusion of competition, the illusion of investment, and the illusion of innovation that currently swirls around Net Neutrality, we can only be sure of one thing: our future will be delayed, it's benefits blunted, and innovation stillborn. It is time that we, as a society, allow the past to die so that we may quit fighting ridiculous and unnecessary battles (some of which I'm gearing up to take into the FCC right now - just the most ludicrous of questions), and begin, together, to lay the seeds of innovation today that are so critically needed to ensure our children reap the rewards of our efforts tomorrow. The future begins right now; we don't have a moment to waste.

Erik

Silicon Valley Attacks Prof. Farber on Net Neutrality - Telecom Atty Responds

Just wrote this for Prof. Dave Farber, who found it interesting that he's ranked as an enemy of Net Neutrality right along with AT&T and Verizon. (See http://www.voip-news.com/feature/15-Greatest-Enemies-Net-Neutrality-102709/) So I thought I'd share a little perspective on my blog (and have written about this extensively for Gordon Cook's group over on his Archives of Economics list:

Prof. Farber:

I think what really matters is why one is an enemy of Net Neutrality. Like you, I do not support it at all. My reasons are primarily legal and practical guided by a decade and a half of representing competitive carriers of all stripes as well as some of nation's largest networks and Internet backbones. My views, however, are entirely my own; they have nothing to do with the views of any of my existing or former clients, but arise from having dealt with these issues before the FCC, every single state public utility commission in hundreds of days of hearings and in multiple federal district and federal appellate courts nationwide.

In a nutshell, Net Neutrality is a top down, disjointed, and legally unsustainable solution to a deep problem in U.S. regulation: monopoly power in the loop plant. AT&T & Verizon combined are more than twice as large as the rest of the market combined. The only other companies with remotely near their market capitalization are Google and Apple. In other words, the real battle is loop versus eyeballs, but there is very little actual competition in any of these areas.

What's insidious about Net Neutrality is not that it aims to open up loop plant, but rather that it is so incapable of doing so. To really understand this in depth, I'd have to take you through the network configurations, money flows, and the legal theories that got us here. In a sentence, however, the secret is as follows: you cannot create sustainable rights of common carriage from the legal cloth of the ESP exemption, which is an exception to common carriage. The FCC has been playing every side of this issue for about a decade now. They are running out of room, legally speaking.

This legal confusion is further evidenced by the abundance of debate, anger, and utter confusion over Net Neutrality. The problem is that Net Neutrality is something different to everyone. The reason, as alluded to above, has to do with the way the law has been written and used to this point in time. Engineers, like many who have erupted into flame-throwing debate on NANOG and in other places, are mostly getting it wrong because they are having trouble distinguishing between the facts of Net Neutrality - protocols, transmission, edge application versus loop technology versus type of network with which these devices and programs interoperate and/or interconnect - with the law of common carriage, of what's left of the ESP exemption, and the shreds of Computer 1-3, mostly which are gone. Juxtaposed against this fog of technology and technology law is the fact of monopoly verticalization across all technology markets. This is also why Tim O'Reilly is only partially correct when he sees the Internet at war with itself.

What all of these individuals are witnessing is the final breakdown of the rule and order of law, which law was written for a copper and analog world. That law - the Communications Act of 1934 - has been expertly gamed for years by the incumbents. They continue to game it with virtuosity, including doing the one thing they do best - wailing and knashing of their teeth as they are thrown right into the briar patch of complex, contradictory, but always regressive and protective regulation which has been their greatest shield against what is and should be the irrelevance of the business models they tell the regulators the rest of us must fund - their ancient copper / analog world.

What they accomplished, however, is the mother of all bait and switch games. They successfully deregulated the most lucrative parts of their businesses on the retail side, maintained subsidy streams on the wholesale / interconnection side by continuing to require any competing network to subsidize their "voice" services in the name of "low rates" and "state jurisdiction" while they deployed competitive IP networks right over the very facilities their IP-based competitors were (and are) subsidizing.

Net Neutrality doesn't work because it leaves that system in place. It provides no truely legally enforcable rights of interconnection, zero actual rights of common carriage (which by definition are Title II rights; all of Net Neutrality is in no-man's land of Title I), and all of which is about to explode before the DC Circuit or some other federal circuit court (where the judges, unlike the FCC in most cases, reads the statute). This will not last long & the ending will not be pretty.

Accordingly, it is a complete waste of time to hurl epithets. Silicon Valley / nethead space, in particular, is woefully under-informed and out of their depth in the Net Neutrality debate because they mostly don't know a thing about telecommunications or telecommunications regulation, which is the kevlar tail wagging the entire Internet right now. It is time they took a deep breath, stepped way back and asked some questions that have something more do to with the next 30 years rather than the next quarter or next iteration of content or social marketing platform. How these issues are framed right now will determine whether, when, how, and how much we & our children pay for whatever it is that evolves from the Internet.

Keep the faith and keep questioning.

Yours truly,

Erik J. Cecil, Esq.