Category: Free the TLC market!

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An essay on Network Neutrality

Axel Spies, a friend and a brilliant Washington-based high-tech lawyer just sent me this paper on Net Neutrality in the US. A must reading.

Net neutrality continues to be fiercely debated in the United States. The new Democratic FCC leadership has committed to expanding and enhancing existing net neutrality restrictions. The current FCC Chairman, Julius Genachowski, recently announced that he will initiate a rulemaking to codify the FCC’s existing network neutrality principles. Those principles, originally set forth in a 2005 “Internet Policy Statement,” declared that to “encourage broadband deployment and preserve and promote the open and interconnected nature of the public Internet, consumers are entitled to:”

* access the lawful Internet content of their choice.
* run applications and use services of their choice (subject to the needs of law enforcement).
* connect their choice of legal devices that do not harm the network.
* competition among network providers, application and service providers, and content providers.

The Chairman has publicly stated that he plans to propose a fifth nondiscrimination principle that would prohibit broadband providers from discriminating against particular Internet content or applications. However, providers would be able to offer “managed services” in some limited contexts. A sixth principle of “transparency” is also debated to require broadband Internet access providers to disclose network management practices.

The FCC’s informal announcement stirred the ongoing debate over the extent to which broadband and other network providers will maintain control over their networks, free from government restrictions, to “manage” their networks, including the ability to block or slow certain traffic, for the benefit of all users. Proponents of a “neutral” network, including Google, Yahoo!, eBay, consumer rights, free speech advocacy groups, and generally the three Democratic FCC commissioners (Chairman Genachowski, Copps and Clyburn), are concerned that without government rules, service providers will act anticompetitively by restricting content, sites, or platforms, on the kinds of equipment that may be attached to the network, and on the modes of communication allowed. In contrast, Internet Service Providers (ISPs), incumbent local exchange carriers (ILECs), including AT&T and Verizon, some cable providers, such as Comcast, free market advocacy groups and generally the two Republican FCC Commissioners (McDowell and Baker) oppose net neutrality obligations.

Earlier legal rulings regarding net neutrality fell short of setting forth a comprehensive policy. The FCC embedded some net neutrality policies in conditions placed on the Verizon/MCI and SBC/AT&T merger approvals. In 2008, the FCC, then led by Republican Kevin Martin, sought to enforce the Internet Policy Statement principles on cable TV provider Comcast when allegations arose that Comcast had blocked consumers from using several peer-to-peer applications. That decision is currently being debated in a federal court appeal. In addition, the FCC principles are currently being imposed on recipients of broadband stimulus funds. “

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More on the Italian Antitrust investigation upon Google News

The strongest claim supporting the Italian Antitrust investigation upon Google News is the alleged Google “dominant position” that would make Italian publishers poorer (better, less rich) by not getting advertising revenues from their online contents.

There is some doubt, nevertheless, that ? Google’s market role could be defined as a “dominant position”. 1

Although it is undeniable that Google is the users’ preferred choice, and that Google has created from scratch a new business model attracting a huge quantity of customers, its legal status can hardly be defined as “dominant” in the Antitrust meaning. A characteristic of “dominant position” is the customer’s “locked-in syndrome”. Once you buy a product (or a service), its technological, purposely created oddities – such as non-standard file format etc. – make it almost impossible to switch to another similar, competing product. The most blatant example is the operating system market, where Microsoft was able to secure its market quota through its dominant position.

In Google’s case, au contraire, users are not “locked-in”: they can buy advertising services wherever they like, and use other search-engines at their will. Furthermore, Google can’t do anything to force its users to use its services, except by improving efficiency and quality. This means, in other words, that Google might lose its business power on the snap of finger. To put it short, cannot rest on its laurels.

As for the specific claims of the Italian publishers, there is neither a contract with them, nor a broader legal obligation falling on Google’s shoulders, to force the search engine to actually find “everything” on the Internet. 2 If they don’t like Google’s “banning attitude” (that still has to be demonstrated, by the way) they can simply find different agreement with Google’s competitors, thus forcing users to change their search engine of choice. Provided – of course – that Internet users find those contents of some value, but this is a horse of a different colour.

  1. “Dominant position” is a concept belonging to the Antitrust law and depicts a situation where a company stays in its market in a much stronger position than its competitors, thus setting the rules for competition. ↩
  2. Oddly enough, this is the first time, at least in Italy, where Google is “charged” with not making contents available, while in the past its management has been accused of not removing “disturbing contents” from its indexes ↩
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Italian Antitrust to storm on Google News?

Yesterday ? the Italian headline news announced that the Italian Antitrust, following ? claims by FIEG (Federazione Italiana Editori e Giornali – Italian Federation of Publishers and Journals), opened an investigation against Google, “charged” with discriminating against those publishers who had denied the availability of their content in Google’s News platform.

As I’ve pointed out in an interview by ANSA, this claim seems to stand on very weak legs.

As first, people use Google simply because it works. As soon as a (not necessarily new) search engine will prove to be more efficient, people quickly discharge Google.

Secondly: Google is not, by far, the only search engine to provide news search. People are not affected by a “locked-in syndrome” like in the operating system field: in other words, nobody has put a gun on the users’ temples to use Google.

Thirdly: the Internet economy is based on a quid pro quo, and the search engine sector doesn’t behave any differently. Publishers have contents, Google the technologies to make these contents available. If they join forces, publishers get traffic (i.e.: advertising), Google its part of the cake. If they don’t, they loose traffic and advertising revenues. That’s the Internet, honey!

Fourthly, let’s admit – for the sake of the discussion – that Google actually does what it is charged with. So what? As soon as the law is abided, Google is a private company, and the only people who can complain about its business strategies are the shareholders. I don’t see any reason whatsoever to force Google to look for specific content.

A final note: this situation is a typical demonstration of how “innovation” is “awarded” in Italy by the content industry. Instead of trying to unleash the power of new tools, the reaction of the traditional powers is to break it. It happened with software, it happened with music and video, and now with the Internet.

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The Pirate Bay war. Does something changes for ISP’s liability?

The new episode of the Pirate Bay war leads to think that something is changing in judges’ mind in re: ISP liability. In the recent Swedish preliminary order neither is the final user the final target of a legal action, nor the ISP. The focus is on the sole and only possible defendant: the one who actually shares illicit contents (apart from the merit of the specific TPB case.) The ISP who provided the housing service for TPB torrent search engine has been ordered to “disconnect” the machine from the network and not, as in the previous episodes, to hijack users’ attempts to reach The Pirate Bay.

It is important to remark that in this trial the ISP is not involved as (contributory) defendant, but only as subject whose cooperation is – de facto – necessary to obtain the compliance to a court order. Thus, we face a situation where:

  • rights of innocent end users are not endangered by the activity of the copyright majors,
  • ISP’s role is not portrayed as those of an accomplish, supporter, or contributory violator,
  • the target of the legal action is focused on the (alleged) culprit.

Again, I don’t want to enter in the legal quarrel about TPB responsibility. What I want to stress is that – should the Swedish approach be confirmed – a step toward and actual respect of legal principles set by dir. 31/00/CE is made.

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Italy to ban on-line anonimyty?

A contribution for ALCEI.ORG
There is a disturbing, arising trend in Italy, of former showpersons now MPs of Berlusconi’s party to propose free speech and anonimity regulation “to protect minors” (but fact shows that they’re mostly concerned of copyright.)
Between January and March 2009 Luca Barbareschi (actor) and Gabriella Carlucci (anchor woman), proposed two draft laws whose declared intent was to enforce copyright protection by shutting down civil liberties.
To be clear:
– Mr. Barbareschi’s Proposal is aimed at create a “single point of cultural control” by granting the Italian State backed royalty collecting agency, the role of exclusive gateway between artists and market. Furthermore, Mr. Barbareschi’s draft law contains so loose statements about ISPs liability that the Government is allowed to do
basically whatever he wants.
– More dangerous, if possible, is Mrs. Carlucci draft law that wants to ban anonymity from the Net, refusing even to consider intermediate forms such as “protected anonymity” (where the ISP act as trusted third party).
Mrs. Carlucci want to establish a committee under the Communication Authority with power of interpreting Internet-related law (in Italy, only magistrates and the Parliament is supposed to), receiving “confidential notice” of infringement, acting as Alternative Dispute Resolution provider, counseling magistrates about the enforcement of preemptive activities ruled under rule of evidence code, like searches and seizure, termporary jail rescrition etc.)
If approved, these (draft) laws will cause the concentration of power in goverrment’s hands, by weakening the possibility (or the right) to defend ourselves in Court.
Another step toward the ethical state?