Suppressing Free Speech with Market Power
"There's a problem. It's called Net Neutrality," Whitacre told the heirs to AT&T's telecommunications empire on June 5. "Well, frankly, we say to hell with that. We're gonna put up some toll booths and start charging admission." See www.savetheinternet.com for Whitacre's full comments.
As the greatest suppression of free speech ever seen in the US coupled with potential economic costs in the hundreds of billions of dollars, ending net neutrality is equivalent to yanking the soapbox from most ideas that ever percolated from the bottom up since 1990.
Imagine that the whole wheat loaf of bread in your favorite supermarket is no longer $2.00. Now it's $5.00 if purchased separately or $30.00 when purchased as part of package bundled with other unwanted food products by your grocer. And it's not available at all if you purchase the $15 base package - white bread only. Now double the effect by applying similar restrictions to producers and sellers of food on the supply side and you have the framework for undermining net neutrality.
Net neutrality, meet your successor, raised prices through forced bundling and limited access, courtesy of facility-based providers everywhere, modelled after Cable TV,not subject to effective competition.
Michael McCurry is one of Whitacre's PR hacks. Selling the "exa-flood" myth as a veiled justification for ending net neutrality, the objective is to portray large content items on the internet like digital movies as high-cost "hogs", compared to other content like an equivalent number of email messages.
This implies that SUV owners should pay more for a gallon of gas than drivers of compact cars. Likewise, electric dryers and air conditioners should be assessed a higher unit rate for kilowatts or kilowatt-hours of electric use, compared to users of light bulbs and fans for the same amount of electricity. Consumers with chronic aches and pains should pay more for the same bottle of over-the-counter (OTC) medicine like aspirin or ibuprofen. Carnivores should pay more for hamburgers and vegetarians should pay higher prices for beans and rice. Etcetera.
Since the demand for products like gas, electricity and medicine has also reached "exa-flood" levels, why aren't the "consumer hogs" of these goods and services charged higher, discriminatory prices in the same way McCurry proposes for buyers and sellers of "hog content" on the internet? How many duhs and hellos are due McCurry and his sponsors for this drivel?
Like internet content, the cost of gas, electricity, medicine and many other items is irrelevant to the many uses applied by consumers. That's what makes it neutral! Facility-based internet providers face costs of providing kilo-bytes and kilo-byte-seconds, just as electric providers face costs of providing kilowatts and kilowatt-hours.
Buyers and sellers of large content already pay for more kilo-bytes per second, just as SUV owners already pay for more gallons of gas per mile. Attempts to stiff SUV owners at the pump for higher prices would fail the laugh test as quick as tagging overweight customers at McDonalds with higher prices for an order of burger and fries.
But McCurry's job is to obscure the obvious.
Even the long-standing principle of volume discounts is mangled as part of the exa-flood myth. McCurry is effectively pricing 40 pounds of bulk potatoes at a "hog price" of say, $16, while charging $8 for an equivalent amount of four, 10-pound bags of potatoes priced at say, $2 each. It's volume discount pricing in reverse.
Just when he's cornered with the high-school math, McCurry removes the shell with the pea under it and demonstrates how he was talking about volume discounts all along - the kind one gets for purchasing the "Everything Package" from Cable TV. Not only does the internet customer get 40 pounds of potatoes for $4 like before. The "Everything Package" offers hundreds of potatoes in all varieties and volumes - dried, mashed, fried and fresh. Wow, what a deal, just like now.
Whether you want potatoes or not.
The "Everything Internet Package" will have what you have now, but at a bargain price of say, triple your current monthly internet bill. Want just the "Base Internet Package" at current prices?. That could get email with no attachments limited by incident count of 10 sends and receives per day, text only web pages absent all medical information and Wickipedia from letters A - L on Monday and Wednesday. Multimedia could be limited to still images of pay pornography and re-broadcasts of Clear Channel at 32 kilo-bytes per second on mono channel.
As Vinton Cerf of Google has stated, it's like a protection racket that charges you for what you already have. It's phony "added value" deployed through limited access used to reduce quality and raise price.
Think of any issue developed since 1990 and ask what happens when, for example, half the internet users are lopped off when they drop the "Everything Package". Awareness of climate change, immigration, Iraq, globalization and a thousand other issues will never be the same. All to grease a few monopoly dollars into the palms of some media thugs who claim competition and democracy is the equivalent of choice among 50 channels of the Home Shopping Network, 2 History Channels and 3 news networks that say the same thing all day long.
Speak and listen now, before you cannot speak or listen at all.
Barry Payne is a free-lance Economist, Ph.D., with 20 years of experience in regulation at the FCC, five state regulatory agencies in Florida, Minnesota, Illinois, North Dakota and as Assistant Professor at Ohio University. He can be contacted at bbpayne@earthlink.net.
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21 Comments so far
Show AllDoes anyone remember the Beider/Meinhof gang? Remember? They were demonized even here.., Do you remember why? BECAUSE THEY KNEW HOW TO DO THEIR HOMEWORK!!!! Do your homework america! Wipe these scumbags off the map.
Times up///
"The 'corporatization of America' during the past century [has been] an attack on democracy."
Noam Chomsky
"The smart way to keep people passive and obedient is to strictly limit the spectrum of acceptable opinion, but allow very lively debate within that spectrum - even encourage the more critical and dissident views. That gives people the sense that there's free thinking going on, while all the time the presuppositions of the system are being reinforced by the limits put on the range of the debate."
Noam Chomsky
" The most effective way to restrict democracy is to transfer decision-making from the public arena to unaccountable institutions: kings and princes, priestly castes, military juntas, party dictatorships, or modern corporations."
Noam Chomsky
"The rascal multitude are the proper targets of the mass media and a public education system geared to obedience and training in needed skills, including the skill of repeating patriotic slogans on timely occasions."
Noam Chomsky
"The Orwellian term is "right to work," meaning "effectively illegal to organize".
Noam Chomsky
"There's a very committed effort to convert the US into something resembling a Third World society, where a few people have enormous wealth and a lot of others have no security."
Noam Chomsky
I have been being endlessly beseiged by my cable carrier, who is my internet carrier to now get my telephone service through them. I finally told the young lady that I did not think it was a good idea for one company to have so much control over all of the communication services (to an area). I could tell that she was totally stunned by this idea. She said, "Really!?!!!" like this was a novel idea. She sounded like a twenty something. I could not summon the word "monopoly" from my mind, but that is what I wanted her to understand, is that we are allowing the monopolization of communication services by a very few. And they whine about their costs and push the costs higher, as the person above alludes to.
It's time to help the young and old alike understand that this privatization and competition campaign has given us a NET RESULT of monopolization by a few like-minded individuals.
Oh, yes, and I also want my local radio stations back.
This is just flatout double charging and that is all there is to it.
Every consumer already pays their Internet provider for access to the Internet which ultimately gets paid to AT&T, Verizon, Sprint etc.
So the Internet providers already make money on that end.
On the server side every hosting site ALSO pays access to the Internet which also gets paid to AT&T, Verizon, Sprint etc.
And you pay for and only receive so much bandwidth. If your allocated bandwidth gets saturated with too many video downloads or whatever then your users downloads will fail.
In which case you can generally pay a higher price to your server-side Internet provider for more bandwidth which then accrues to AT&T, Verizon, Sprint et al.
Both sides are ALREADY PAYING for their bandwidth and Internet providers are making a tidy profit on it.
So this is plain and simple double-charging.
There is no need to go into fancy explanations which only confuse ordinary Internet consumers who usually have no idea what goes on to run Internet hosting services.
All they need to know is - I pay my bill - I should NOT have to pay more!
Period.
Politics for Profit
Americans are trapped in a corrupt political system dominated by Politics for Profit, and the people collecting those profits represent, at most, ten per cent of the population. Which means the other ninety per cent of us are ignored and underrepresented by our government. Republicans were right all along about government being the problem, not the solution, but they lied about the causes. Social spending for the good of all wasn't the problem, the looting of the national treasury by the richest of the rich is the problem.
Government contracts are the fast track to immense wealth, but first you must bribe a congressman to get the contract. Our government was specifically designed by lawmakers to facilitate bribes for favors: we call it campaign contributions. Our elected leaders are nothing more or less than Middlemen employed by insatiably greedy corporations to enhance their profits at the expense of American taxpayers.
Which best describes our system of government, democracy or capitalism?
Americans can continue to delude themselves about the true nature of our political system, but staying the course is the fast track to steadily declining standards of living for ninety per cent of us.
.
I signed the petition, and thereby sent a letter to my representatives saying that I wanted them to oppose this. We cannot let this happen!
RandB: Love the jubilee idea! It's a way around the evisceration of estate taxes.
Foam weapons: Good analogy on what a lack of net neutrality will mean.
As for our shared angst (on what to do about the abundant challenges and injustices we face), more and more I see this as a global thing. These gigantic corporations are worsening life, little by little, strategic step by step, AROUND the world. Expect something akin to a proletariat revolution within 7-8 years. Climate destabilization could act as a facilitator.
Paranoid Pessimist,
We are on the same frequency, I appreciate the progressive forums for at least we have some way to communicate and educate ourselves.
The Internet makes it possible, we must definitely keep it away from Corporatocracy control.
However I share your frustration, a lot of whining and howling without action is rather worthless.
Public TV like PBS with shows like Frontline, Independent Lense, Bill Moyers, and the like do a prety god job at educating the public. But which public watch those shows ? Ourselves !, the rest is watching American Idol, or the latest earth-shaking news about celebrities.
Somehow we need to go back to massive street protests, that's what stopped the war in Vietnam.
Please help to find real leaders, to organise protests, we need another tea party, this time against this aristocratic corporatocracy.
AT&T doesn't sell commodities like potatoes, they provide and maintain infrastructure like roads...
Basically it's like AT&T saying, "Ok, we built all the roads in your town using taxpayer money. Every year, you pay taxes and pay for us to build OUR roads. We also charge a fee based on how large your vehicle is that goes directly to us, and all our roads only allow 15 mph, compared to other towns that allow 100 mph. We also charge anyone with a driveway or parking lot that connects to our roads based on how big the connection is... for example Google has a lot of traffic going into their parking lot, and the amount of cars that go in determine their bandwidth fees which we already charge for. That's the current system... both consumers of the road being delivered products and big companies and small companies delivering products are charged.
So now people are saying ANYONE should be able to drive on OUR roads, after they paid their fees! That's ridiculous!!! We want to outlaw certain cars from some of OUR roads, because only companies who pay us extra should be able to get the benefits of these roads. You see roads need a lot of maintenance. The only way to pay for this (other than the billions in taxes you gave us) is to outlaw certain consumers from certain roads if they only have a "basic road package" that includes their local neighborhood and maybe the major stores... but anything else we'll have to charge extra. Just because you and your friend both paid for a "basic road package", doesn't mean that you should be able to visit each other! This isn't a free ride anymore!"
So we gave these companies $200 billion to provide a fiber network across America and they did nothing...
http://www.muniwireless.com/article/articleview/5011
Small business depends on this infrastructure, not to mention U.S. consumers who are charged more for internet access than any other country. We are 16th in the world in terms of broadband deployment, and our average speeds are laughable compared to Japan or Sweden. If any company in America owes us something, it is definitely AT&T. Yet they are asking for more hand-outs and deregulation of crucial infrastructure... it's unbelievable.
I wish I HAD some novel ideas to capture control of the government. I've been disappointed with the results of progressive internet use -- not blaming the users. I always think that the Shah of Iran was brought down with audio cassettes and here we have the most extensive, sophisticated, user friendly mass communication system ever devised, and so far, all it's doing is preaching to the choir.
Now is the time of golden opportunity when things are changing, when the overreaching of the Bush gang has created blowback for the right wing. But the Powers That Be will, as usually, gain control of the situation and co-opt it -- the example being so-called "greenwashing," all those ecoporn commercials the corporations are putting out there to show how concerned and environmentally friendly they are.
We need to study communication techniques to find ways to teach the American people not to be so succeptible to slickly produced bullshit. They're going to resist. The truth is unpleasant, downright scary. But unless the populace can be somehow suckered into seeing it, "they" will still have things their way -- at least till the environmental all hell breaks loose.
This time AT+T is the uber villain threatening freedom and the implication is that Google is good, being the image of sensible knickle unt' dime, that they are. Bullshit!
How many servers and databases is your 'mo' being bounced around each time you do post to CD? Google, AT+T, etc -- everybody wants piece o' the action - any way to pick up a penny for whatever aspect of web usage Joe Regular engages in.
After all, the Street demands profit.
Google, Verizon and AT+T can all go to hell, according to most consumers, but this fact never makes the editorial page. What we have here is dueling titans, including the Gov with taxes.
Another selfish and unwelcome initiative by Corporate America, what can we do ?
Don't tell me to call the politicians again...it does not work. They are all corrupted or dependant on corporate contributions to keep their jobs.
Feeling overwhelmed, disorganized, scattered anyone ?
We should try to stop this Corporatocracy that is ruling America for good, instead of fighting piecemeal one problem at a time. Like this is a never ending bad dream.
Please suggest novel ideas so we the people can control our government once and for all.
Jan Steinman wrote: "Ah, but the airwaves have been auctioned off, rememeber"
The thought occurred to me as I read that was that in Old Testament times there was the Jubilee year, every fiftieth year where property must be returned to its original owner. Property could be sold but not forever, just until the Jubilee.
I think that in that future time when the people regain the levers of power for a while again that we would do well to add that concept to our Constitution, that the Commons cannot be sold to private interests forever, but rather must return on the next Jubilee. This would not stop the powerful from corrupting our goverments in order to purchase our water, airwaves, public lands, libraries, and other Commons, but it would serve to remind us (and them) that the Commons is ours and must be returned for the next generation's use.
That is to say that this generation owns and tends to the Commons today. It belongs to the next generation tommorrow. We can sell our use of it today but we cannot sell the next generations' ownership and use of the Commons because that is not ours to sell. On the Jubilee the Commons must be returned to its owners, our children who can only sell their use of it up to the next Jubilee.
I know Jan, but that doesn't make them any less a part of the commons for all the people (which I suspect you know too!). What the FCC has wso foolishly given away can be reclaimed as easily by rule change--it would be nice to be able to avoid that with the net.
Poet wrote: "You don't own the net anymore than broadcasters own the airwaves."
Ah, but the airwaves have been auctioned off, remember?
rtdrury: good points you made. Here in my locale in the rustbelt the gas boycott was far and wide po-poohed by editorialists and commoners alike. The point that they all missed, while dissing it for being inneffective, was that it was a spontaneous grassroots action that I'm sure has caused some consternation in the halls of the wealthy and powerful. Though fraught with contradiction (gasoline SHOULD be more expensive) and disheartening to realize that ordinary people will protest for their pocketbooks but not against the killing of innocents abroad for oil.
Guide for NeoConservatives:
Think of the worst and approve it.
To Ed Whitacre and his little PR toady Michael McCurrey I say "go to hell". You don't own the net anymore than broadcasters own the airwaves.
This is one of those issues like the Iraqi war funding where every representative or senator ought to be held accountable for their vote on this issue no matter with what else it may be bundled or hidden.
The short term solution is mass action such as general boycotts. Contrary to the propaganda, "boycott gasoline day" and "time magazine cancellation month" type boycotts are hugely effective in demonstrating the people's resolve, comprehension, and ability to organize.
The long term solution is public owned and operated communications satellites. This is accomplished through donated time "for the greater good". The technology is maintained under a public license such as the GPL.
Keeping people dumb and making them even dumber, is, of course, one of the goals behind turning the internet over to giant corporate monopolies.
To clarify some interesting points by foamweapons and others:
1) Net neutrality acts as a substitute for what competition could provide, or fails to provide.
2) Networks like the highway system are "natural monopolies", so competition fails to provide them efficiently. (Having two highways next to each other would be absurdly wasteful.) Instead, they are regulated as a single system while constructed by the private sector.
3) Networks like broadband on DSL, Cable and Wireless are more like highways economically than food products like bread and potatoes that travel over the highway.
On a scale between effective competition and strong market power, these networks are sharply skewed towards the monopoly end with strong market power (the ability to raise price above cost), unlike bread and potato products.
4) "Content" that flows over the highway is irrelevant, and thus NEUTRAL with respect to various costs imposed on users of the highway (absent say, dangerous materials like nuclear, etc). So large trucks pay higher road taxes than compact cars to offset the wear and tear of heavier WEIGHT, etc, regardless of the CONTENT inside the truck.
For example, McCurry implies that a congestion fee (designed to reflect the cost of using road space) for controlling "highway hogs" should be, say, ten times that assessed to five small cars - even if a large truck uses only five times the road space.
Similarly, Whitacre is asserting something like the reverse of a "high occupancy" highway lane (HOV) that allows vehicles with more than one occupant to move past the rest at higher speeds. Instead, he wants to single out existing cars with only one occupant and charge them more for what they're doing now.
5) Imagine privatizing a section of the highway system for which the new owner proceeds to recover costs with various fees assessed to the vehicles that use it. If the situation was subject to effective competition, those fees would be driven to reflect costs imposed by weight and the use of road space, NOT CONTENT.
If the new owner tried to block vehicle access based on content, or tried to charge prices above that reflected by weight and use of road space, users would immediately switch to the competition.
But that degree of competition does not apply to most users of the highway or internet broadband. The reason most vehicles on the highway are not assessed usage fees based on their CONTENT or faced with restricted access is the current policy of "HIGHWAY NETWORK NEUTRALITY".
In addition, all those goods and services flowing over the highway have already been paid for. If the owners of the privatized highway started branding and pricing them by CONTENT for amounts over and above that already assessed for using the highway, that would be a form of property theft equivalent to extortion shakedowns.
6) These comments may sound obscure or mathematically confusing for some. They should not be. Breaking down the issue with simple illustrations is important to force the debate to a more relevant forum.
It's like an Intelligent Designer explaining the scientific method or a Holocaust Denier exploring the motives of Hitler. Any direct debate with these hacks is useless. But a careful and simple breakdown of the fatal flaws in their arguments is important to lay them bare before the public.
Take the Kennedy assasination. Most people still believe those film frames of Kennedy's head snapping backwards prove there was a second shooter in front of the car. But subsequent analysis of the film proved the opposite. The impact of the fatal headshot from behind by Oswald was so powerful that it snapped Kennedy's head forward fast and hard, bouncing his chin off his chest in a backwards direction. The sequence of film frames missed the first part with the head going forward and only captured the last part with the head going backwards. Even cameras don't tell the truth sometimes.
A large part of undermining net neutrality is associated with undermining conventional concepts of competition. Some of the positions taken by these clowns are in absurd contradiction with the principles of economics generally associated with capitalism. Like the film frames of Kennedy, they reach opposite conclusions of what happened and use them to make equally ridiculous predictions.
7) Some potential talking points:
a) Competition among existing users of the internet in the US exist now. Nothing is broke. There's little to fix in regard to content beyond what is already being solved in ongoing legal enforcement. Anyone with a connection can get their comments in somewhere and obtain information from any other connection. It's one to all and all to one on a reasonably level playing field of free speech.
b) Accomodate growth in internet use with the current flat monthly fees or separate fees for kilobytes (capacity) and kilobyte seconds (volume). This is similar to electric rates where the "content" is an underlying homogenous commodity that travels over "neutral" transmission and distribution lines and is irrelevant to how electricity is used. (Even if this is enforced, the levels of charges may rise substantially above the cost of provision given current levels of market power.)
c) Respond to ridiculous claims with ridiculous analogies. If McCurry says large trucks (i.e. digital movies) are "hogs" that must be priced differently, ask if that means when one truck uses the space of five cars, do five cars use the space of one truck? If so, how much should the cars pay? Five times that of the truck? Ten times? Zero?
What if the trucks have already paid? Aren't they paying double? Why not charge the five cars a lower per unit price compared to the trucks? Why is the price movement always in an upwards direction when per unit cost in the industry are usually falling?
Doesn't competition drive price to cost? Doesn't competition eliminate discrimatory pricing of homogeneous products like kilobyte seconds?
Or is all the competition claimed to rain down on facility-based providers a myth?
B Payne, Economist, Ph.D.
bbpayne@earthlink.net