Advocates of network neutrality are busily spreading a colorful story today. It begins with a piece in Forbes by Phil Kerpen of the Heartland Institute about the effects of threatened network neutrality legislation on investment in the Internet’s infrastructure. Kerpen discusses a study of telecom trends by Deloitte & Touche to the effect that the uncertain regulatory climate is bad for investment, and without new infrastructure the Internet will soon be in trouble.
For this, Kerpen is attacked by Paul Kapustka and Om Malik at GigaOm as a lying shill of the telcos:
Since Kerpen doesnâ€™t actually link to the study, we are left to wonder what his conclusions are based on. It looks like DT doesnâ€™t even believe thereâ€™s a problem, since another research paper there3 predicts that â€œunrelenting progress in processing power, network bandwidth and storage capacityâ€ will let electronic games proliferate. What youâ€™re seeing in Kerpenâ€™s missive is another offering from the â€œtelco chorus,â€ a group of bloviators who are paid either by conservative advocacy operations (like Kerpenâ€™s Americans for Prosperity), or by groups indirectly supported by telco contributions.
Broadband Reports fires up this smokescreen:
Who’s to blame for this proclaimed bandwidth apocalypse? Network neutrality advocates, who are scaring off capacity investment, according to Phil Kerpen of Americans For Prosperity. Deloitte & Touche’s actual capacity prediction can be found here, but they make no mention of network neutrality law fears as the primary reason for the crunch — instead stating companies aren’t increasing capacity “because consumers will be unwilling to pay increased costs.”
Mike Maslick at Techdirt adds his own twist to Broadband Report’s fantasies:
It’s based on a Deloitte & Touche report, claiming that there hasn’t been enough backbone buildout to handle the growth in traffic — and the writer somehow connects this to network neutrality by saying it’s because of fear over network neutrality rules that the buildout isn’t happening. There’s just one problem, as Broadband Reports points out, the D&T report doesn’t mention network neutrality at all, and there’s no evidence to suggest that network neutrality has anything to do with backbone buildout.
The problem with these vicious and personal attacks (beside their evident rudeness) is that they’re completely off-base. The D & T Telecoms Predictions 2007 report has a whole section on network neutrality, ending with this remark:
Those who oppose creating [net neutrality] mandates argue that their business models are being undermined by Internet companies offering bandwidth-hungry services such as video and audio-streaming, heavily networked online games, video-based chat and peer-to-peer downloads. Many ISPs and telecommunications companies would like to start charging content companies, and others, a fee to provide access to their services. There are two primary reasons for this. The first is that ISPs and telecommunications carriers are seeing revenues stagnate. As penetration growth slows, competition drives down prices and rapidly rising Internet use among existing customers erodes margins. The second is that some of the largest Internet companies are enjoying bumper revenue growth and increasing profitability, and carriers would like to use their position in the value chain to participate in this growth.
Internet usage and traffic are both growing rapidly. There is an increasingly urgent need for new revenues that could fund expansion of the infrastructure on which the Internet runs. For example, on several key intercontinental routes, such as that between Asia and Europe, backbone capacity has grown slower than usage (see Figure 1), and may increasingly struggle to keep pace with demand. Similarly, ISPs and carriers may have to invest in higher capacity infrastructure to continue to be able to provide genuine broadband speeds to consumers and business users.
Balancing the two sides of [the network neutrality] debate is likely to remain challenging. Both sides have merit; both have their flaws. Clearly, something has to change in the economics of Internet access such that network operators and ISPs can continue to invest in new infrastructure and maintain service quality, and consumers can continue to enjoy the Internet as they know it today. (page 7, section titled The Network Neutrality Debate Needs Resolution.)
So whether you agree with Kerpen or not, it’s clear that his article is true to the Deloitte and Touche report’s summary of the issues, and the attacks by Kaputska, Malik, Broadband Reports, and Maslick are as wildly off base as they are vicious and personal.
UPDATE: Doc Searls jumps on the bandwagon right behind Broadband Report’s pseudonymous Karl:
As Karl notes at Broadband Reports, Deloitte & Touche’s actual capacity prediction can be found here, but they make no mention of network neutrality law fears as the primary reason for the crunch — instead stating companies aren’t increasing capacity “because consumers will be unwilling to pay increased costs.”
Like Karl, Doc didn’t bother reading the D & T report, he read a summary in a news article and drew wildly wrong conclusions from it. The bottom line here is simple: before calling somebody a liar, check your facts. Karl, Doc Searls, Mike Maslick, Paul Kapustka, and Om Malik couldn’t be bothered with that in this case, and they’re all supposed to be journalists.
UPDATE 2: See this post on the fallout from my criticism of Karl, et. al. Doc Searls posted an impressive retraction.