Tomorrow’s cover today: The internet’s openness is uner threat. But the crisis can still be averted.
I’ve got to issue a concurring opinion to this cover story’s conclusions:
What about the risk that operators will fragment the internet by erecting new road-blocks or toll booths? In theory, competition between providers of internet access should prevent this from happening. Any broadband provider that tries to block particular sites or services, for example, will quickly lose customers to rival firms—provided there are plenty of them.
Why net neutrality is a distraction
But that is not the case in America. Its vitriolic net-neutrality debate is a reflection of the lack of competition in broadband access. The best solution would be to require telecoms operators to open their high-speed networks to rivals on a wholesale basis, as is the case almost everywhere in the industrialised world. America’s big network operators have long argued that being forced to share their networks would undermine their incentives to invest in new infrastructure, and thus hamper the roll-out of broadband. But that has not happened in other countries that have mandated such “open access”, and enjoy faster and cheaper broadband than America. Net neutrality is difficult to define and enforce, and efforts to do so merely address the symptom (concern about discrimination) rather than the underlying cause (lack of competition). Rivalry between access providers offers the best protection against the erection of new barriers to the flow of information online.
This newspaper has always championed free trade, open markets and vigorous competition in the physical world. The same principles should be applied on the internet as well.
Net neutrality should be a distraction easily overcome by market forces, but we here in the States closed that door years ago with the Brand X decision from the Supreme Court, eliminating common carriage on Information Services (cable internet) & then subsequently removing the requirement from DSL operators. There was once a time when many DSL providers would compete for the same customers and that was the likely outcome for cable, and then to the next generation of Fiber to the Home.
Common carriage has been gone for half a decade. If you think the fight over Net Neutrality is a distraction, just wait until what you see the telcos spend when common carriage is back on the table.
Before I published The Innovator’s Dilemma, I got a call from Andrew Grove, then the chairman of Intel. He had read one of my early papers about disruptive technology, and he asked if I could talk to his direct reports and explain my research and what it implied for Intel. Excited, I flew to Silicon Valley and showed up at the appointed time, only to have Grove say, “Look, stuff has happened. We have only 10 minutes for you. Tell us what your model of disruption means for Intel.” I said that I couldn’t—that I needed a full 30 minutes to explain the model, because only with it as context would any comments about Intel make sense. Ten minutes into my explanation, Grove interrupted: “Look, I’ve got your model. Just tell us what it means for Intel.”
I insisted that I needed 10 more minutes to describe how the process of disruption had worked its way through a very different industry, steel, so that he and his team could understand how disruption worked. I told the story of how Nucor and other steel minimills had begun by attacking the lowest end of the market—steel reinforcing bars, or rebar—and later moved up toward the high end, undercutting the traditional steel mills.
When I finished the minimill story, Grove said, “OK, I get it. What it means for Intel is…,” and then went on to articulate what would become the company’s strategy for going to the bottom of the market to launch the Celeron processor.
I’ve thought about that a million times since. If I had been suckered into telling Andy Grove what he should think about the microprocessor business, I’d have been killed. But instead of telling him what to think, I taught him how to think—and then he reached what I felt was the correct decision on his own.
The Walkmen – “Woe Is Me” – Gothamist House (by Foglight Films)
ROCK OUT! We invited Gothamist & The Walkmen to come give an impromptu concert in our hallowed marble halls (sort of like A Takeaway Show). It was kinda awesome (and the new songs are great).
Ever wonder why its called a “Timestamp?”
From the back of a memo in the 1939-1940 World’s Fair Collection at NYPL
