Tim Wu is talking about broadband. He says [rough notes!]:

US broadband penetration, at 16% of inhabitants, is 12th-16th in the world. We are #1 or #2 in terms of total connections; China is the other.

There is a fundamental divide between “openists” and “deregulationists” who disagree about the point and nature of a telecommunications network.

Tje openists think of the network as an “innovation commons.” They’re interested in what the network makes possible. They believe the essence of a network is a public infrastructure: a means, not an ends. The network is like the electricity network: You care not about current but about the appliances it makes possible. 2) They believe in Net neutrality: The Net ought not make choices about what it’s used for. 3) And they believe in the end-to-end network, a Darwinian theory of innovation. E22 maximizes the number of people who are innovating. An E2E enables a fair fight.

The deregulationists think that if you just keep regulation out of the Net, it’ll flourish. 1) They believe in propertization. “When the word commons is used, tragedy is never far behind.” They don’t believe in lack of stewardship. Property owners, motivated by the improvement of their property, will improve the Net. That’s where innovation comes from. 2) We need to provide the proper incentives to stimulate and direct that innovation. 3) They are even more suspicious of government than are the openists.

Cisco in 2002 said that the greatest potential growth in the Net was in the transformation of the Internet from a stupid network into an intelligent one (“smart pipe”), enabling carriers to provide added-value services, e.g. video and voice. This makes deregulationists happy.

Tim Wu is talking about broadband. He says:

US broadband penetration, at 16% of inhabitants, is 12th-16th in the world. We are #1 or #2 in terms of total connections; China is the other.

There is a fundamental divide between “openists” and “deregulationists” who disagree about the point and nature of a telecommunications network.

Tje openists think of the network as an “innovation commons.” They’re interested in what the network makes possible. They believe the essence of a network is a public infrastructure: a means, not an ends. The network is like the electricity network: You care not about current but about the appliances it makes possible. 2) They believe in Net neutrality: The Net ought not make choices about what it’s used for. 3) And they believe in the end-to-end network, a Darwinian theory of innovation. E22 maximizes the number of people who are innovating. An E2E enables a fair fight.

The deregulationists think that if you just keep regulation out of the Net, it’ll flourish. 1) They believe in propertization. “When the word commons is used, tragedy is never far behind.” They don’t believe in lack of stewardship. Property owners, motivated by the improvement of their property, will improve the Net. That’s where innovation comes from. 2) We need to provide the proper incentives to stimulate and direct that innovation. 3) They are even more suspicious of government than are the openists.

Cisco in 2002 said that the greatest potential growth in the Net was in the transformation of the Internet from a stupid network into an intelligent one (“smart pipe”), enabling carriers to provide added-value services, e.g. video and voice. This makes deregulationists happy.

Both like Schumpeter. But they like different things he said in hi career. The openists like the idea of super hero entrepreneuers. Deregulationsists like the idea of great firms being innovative. The tension comes when the great firms try to kill the super hero entrepreneurs.

Telecom has three layers: app, transport and user. When a transport provider wants to integrate with an application provider, is that good or bad? The Chicago school suggests that generally that type of vertical integration is good: There are some services that can only work in the app and the transport work together. The openists split on this. Generally they don’t like vertical integration. E.g., doing it to kill competitors. E.g., if a cable company wants to offer VOIP, are they doing it to benefit their customers or to kill Vonage and Skype?

In the House of Reps there is now a telecom reform bill that includes “network neutrality” language. The inspiration for network neutrality comes from Carterfone’s desire to sell a little rubber cup on the receiver of your phone to screen the call from others. Bell claimed this affected voice quality and banned it. The courts said that users have the right to use their phone any way they want so long as they’re not illegal or harmful to the network. Applied to the Internet: Any user has a right to go anywhere you want. Hence, “it should be illegal, absent good reason, for a carrier to prevent you from getting what you want.” The deregulationists don’t like this much, although Michael Powell was an exception.

Tim ends with a case study of where the two camps face off: “What should happen when a company — maybe, let’s say, Apple — provides you with a television that allows you to download shows you want to watch,” bypassing your cable provider? Should the cable company be allowed to block that service? Or should it be constrained to carry Internet TV even if it destroys its cable TV business?

Q: I’m an openist, but I really just favor a diferent type of regulation.
A: The idea that the central planners ought to decide the future of telecommunications is out of favor in the US. In the 1960s, the FCC was sure the UHS was the future, and they blocked cable…

Q: (Jock Gill) The quarterly obligations of the private sector keep it from investing in this type of infrastructure. Also, what metrics? Are we citizens or consumers? That makes a big difference. There are more bits coming out of homes than going into them.
A: This is a split among the openists on this. Some only care about economic growth. Some want to consider other values.

Scott Bradner says that the FCC is worried that if the providers fail, there won’t be a network to be open about. They believe the Next Generation Network is critical for future innovation. The NGN is a “carrier-managed, content sensitive network.” (“conjtent-sensitive” = packets are typed so they can be handled differently.) (Scott disagrees.)

In response to a set of questions, Tim says that the NGN folks say that the Net neutrality folks are actually favoring text-based content because the Net is much better at delivering text than video or voice. The counter, Tim says, is that it’s a matter of bandwidth. Tim: “Sometimes death is in the national interest.”

Tim: “The future of telecom is in figuring out when discrimination is ok and when it’s not.” As examples of why we need Net neutrality, he points to AT&T’s attempt to prevent people from attaching wifi and its attempt to ban VPNs. He predicts that when a cable company faces a competing TV network over its line, it will step up the degree of opposition. [Tags: TimWu telecommunications berkman]

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