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David Isenberg has a gift.  Put a pen in his hand, and eloquence flows.  His latest argument for net neutrality is one of those pieces.  He rails at the phone companies, worries that innovation will die, and finishes with

If the United States fails to understand this, U.S. Internet leadership will follow U.S. leadership in agriculture, in steel, in autos, and in consumer electronics to other countries that do.

Short sighted mistakes by lawmakers pandering to special interests have dogged the technology industry for many years now.  For example, in the mid-90’s I wrote the Seattle Times warning that the combination of a failing education system and unduly harsh restrictions on H1 visas would lead to the offshoring of the US software industry. That prediction came true. Not too long ago, Microsoft announced that it would put $1.5 billion into an Indian facility after fighting 10 years to bring more skilled workers to North America.

Fortunately, we still do live in a free market.  Even if a two tier internet does emerge, it won’t be long before one of the cartel of incumbents breaks ranks with a single rate all-you-can-eat offering.  At that point, it’s all over.  The others will have to follow suit.

The whole argument over net neutrality is nothing more than a very public negotiation between the incumbent telcos and the portal providers over the price of the portal’s content.  The telcos understand what the Voice 2.0 world will look like.  They understand that in the Voice 2.0 world, their function is reduced to reselling content and services provided by others.   While they still have power, and still have the ability to control access to the customer, they’re trying hard to ensure that they get the best price for that content. The incumbent’s ability to lobby congress is their best negotiating tool right now.

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