Kevin Martin’s secret regulations

As the crescendo of criticism builds against the FCC’s pending publication of its new rules for Internet access providers, the New York Times emerges as the sole source of pro-FCC coverage. They publish a bizarre Op-Ed by Free Press chairman Tim Wu equating competing carriers with OPEC and mistaking the general trend in broadband prices – sharply down – with the trend for gas prices, which goes in the opposite direction entirely:

AMERICANS today spend almost as much on bandwidth — the capacity to move information — as we do on energy. A family of four likely spends several hundred dollars a month on cellphones, cable television and Internet connections, which is about what we spend on gas and heating oil.

Here’s what’s happening to broadband prices at Comcast:

High-speed Internet revenue increased 10% to $1.8 billion in the second quarter of 2008 from $1.6 billion in 2007 reflecting a 12% increase in subscribers and a 3% decline in average monthly revenue per subscriber to $42.01, reflecting the impact of additional bundling and the recent introduction of new offers and speed tiers.

I’d love to see a 3% monthly decline in gas prices, even at the same volume level. But the Comcast figures show consumers upgrading to higher speed tiers (like Blast, which I measure at 28 Mb/s download speed) and still seeing an average decline in prices. Wu isn’t talking about life in the Real WorldTM.

Martin himself held a pow-wow with Times reporters, hoping to evoke some of that old-time populism that the nation’s elite daily is so good at. BITS blogger Saul Hansell reports on Martin’s faulty facts and shoddy analysis:

“The network operators can recoup their investment in the network and can charge for access to network services, but consumers have complete control over the devices and content that don’t have anything to do with investment in the underlying network,” he said.

I asked about reports that AT&T now bans all use of peer-to-peer networking software on its wireless data network. It also bans some video services, like the Slingbox feature that lets you watch your home television signal on your cellphone.

Mr. Martin declined to answer. His view is that the commission should not publish explicit regulations. Rather, it should address complaints that are made, as it did with the Comcast case.

“The commission is very careful in that we look at the particular facts that are in front of us. We are not judging the next case,” he said. “Hard and fast rules can actually be over- and under-inclusive, and they can also have adverse impact.”

Mr. Martin was asked whether the commission’s approach will push more Internet providers to start to impose caps on how much bandwidth consumers can use.

He said he wanted to reserve judgment on that trend. He seemed comfortable with Internet providers offering services with limits, so long as they are clearly stated.

So we have this new regime for Internet access providers where every move they make is to be judged according to a list of secret regulations. If ever there was a recipe for stalemate, this is it.

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