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False Pundits, Forbes and Broadband

The Wikipedia profile of Phil Kerpen, a Beltway insider and policy director for Americans for Prosperity, should be enough of a reason for us to not take him too seriously. At least not when it comes to issues pertaining to technology, network neutrality and broadband.

His politics notwithstanding, his column over on Forbes.com, Internet Super Traffic Jam, blaming network neutrality for what he thinks is a coming traffic jam is just asinine piece of drivel, which doesn’t take into account how networks are built and how technology has evolved.


Kerpen uses a study by Deloitte & Touche, which says that the Internet backbone speeds are going to be reduced to a crawl if there isn’t substantial infrastructure investments and deployments, to argue against net neutrality legislation. DT, Accenture, McKinsey and others showed their true worth when they advised companies like Enron. So why take them seriously! But that’s a different rant.

The infrastructure investments in the backbone have been an ongoing process. Level 3 and Global Crossing, despite all their issues, have been using technologies such as boxes made by Infinera to lower their costs, and add more capacity. Since Kerpen doesn’t actually link to the study, we are left to wonder what his conclusions are based on. It looks like DT doesn’t even believe there’s a problem, since another research paper there predicts that “unrelenting progress in processing power, network bandwidth and storage capacity” will let electronic games proliferate.

What you’re seeing in Kerpen’s missive is another offering from the “telco chorus,” a group of bloviators who are paid either by conservative advocacy operations (like Kerpen’s Americans for Prosperity), or by groups indirectly supported by telco contributions. Other groups who make similar arguments to Kerpen’s have been outed before, and their goals of trying to provide “expert” or “unbiased” opinion are pretty transparent.

It’s surprising that a generally reputable outlet like Forbes is giving airtime to someone like Kerpen and his by-the-Ma-Bell book net neutrality opinions (service providers need incentives to invest!). Even if Ed Markey & Co. get a net neutrality bill to the President’s desk this year, there’s no guarantee it will be signed. The only thing stopping providers from building the network of the future is their decisions to spend money elsewhere, like in spending $89 billion to buy BellSouth and its networks of the past.

Luckily, the industry has innovators like Cisco building its CRS-1, and deployers like the folks behind the 10-gigabit Internet2, who are helping build the bigger pipes of the future. The “Internet is falling” argument is just another telco talking point, tailor-made to add more FUD instead of clarity to the debate. Too bad Forbes doesn’t have the time to find writers who actually know what they are talking about.

(Om Malik contributed to this post.)

24 Responses to “False Pundits, Forbes and Broadband”

  1. Not a shill for telecom interests at all, but logic tells you that the pipes are the property of the owners, who should be allowed to do whatever they want with them.

    Interconnectivity, however, is the entire reason for the internet, it would be ridiculous to assume that the telcos somehow want to reduce or eliminate that, unless they are stupid.

    But why are you people so damn afraid of the market? I mean if there are substantial legacy structures in the system that impede market workings let’s hear about and eliminate them, but otherwise why insist on imposing a regulatory model that has retarded communications development for well over 100 years?

  2. AT&T and Verizon invest, and bet their future, in building legacy-like mass-media centered closed video networks that mimic many on the shortcomings of cable pay-TV networks at a time when over-the-top (direct to consumer) broadband video offerings diminishes the value of these legacy models.

    Isn’t that really at the core of this argument? Telcos are making a backward-looking investment in the face of a multitude of forward-looking challengers who will distribute video directly to their niche audiences, no matter what.

    Frankly, if the telcos let go of their obsolete mass-media entertainment model from a bygone era, then perhaps they could make better use of their available capital. It’s just a thought, maybe they should address the forward looking threat.

    They say that timing is everything in business, and it just seems like the telco investment in linear broadcast television is 20 years too late. Even if the telcos win a net neutrality battle, or two, won’t they still loose the war of engaging the growing populous of consumers who have cast aside the ‘couch potato’ persona?

  3. The essence of the network neutrality debate in Congress goes directly to this point: “…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…”

    The Markey and Snowe-Dorgan network neutrality bills prohibit “charge for prioritization”, and the AT&T threat to charge Google for high-QoS service was what set off the firestorm last year. So while it is true, in a naive and childish way, that the phrase “the economics of the Internet” might mean “anything”, in the context of network neutrality discussions we know exactly what it means.

    So the piece doesn’t say “network neutrality advocates are primarily to blame for a capacity crunch” in exactly so many words, it does say exactly that to the informed reader.

  4. “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, “The Network Neutrality Debate Needs Resolution”.)”

    An economic change could mean anything, including a per byte usage model or increased use of already used traffic shaping to manage bandwidth demand. It could also mean higher prices.

    For the fiftieth time, nowhere does the piece say network neutrality advocates are primarily to blame for a capacity crunch that hasn’t happened yet…

    That was a spin applied by the “Americans for Prosperity” piece, which tries to suggest that the fear of network neutrality laws means nobody is going upgrade their networks, which is total nonsense.

    Not only is it nonsens, it’s suicide on the eve of a video explosion with FTTH and DOCSIS 3.0 competition a few years off.

    It’s political hackery, it’s obvious, and you clearly support it.

  5. Here’s the relevent part of the D & T Report:

    “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, “The Network Neutrality Debate Needs Resolution”.)

    The bottom line: Kerpen’s reading of D & T is more accurate than DSL Reports’, Techdirt’s, or GigaOm’s. D & T says the economics of the Internet have to change, but the NN freaks say no they don’t. Face it Karl, you’re busted.

  6. That’s what NN is all about Karl, giving Google access to video QoS on other people’s networks for the price of standard broadband. They’re demanding Fedex Overnight for the price of USPS Bulk Mail.

    Verizon spends lots of money on lobbying to prevent the seizure of their investment through network neutrality regulations, do they not? And if some of that money ended up at Heartland you’d be all blue in the face over it, would you not? So just because Verizon took a gamble on FIOS (one that AT&T is not willing to take, and one that I applauded Verizon for taking) doesn’t mean it’s not a gamble while NN is on the table.

    You linked to Techdirt in your first comment in this thread, and your DSL Reports post slightly re-words Maslick’s false charge. Your language and his are so similar I mistook your weaseling on DSL Reports as a direct quote rather than the paraphrase that it is.

    I apologizes for accusing you of quoting a lie rather than writing a misleading truth.

  7. Your reading comprehension needs work. DSLReports does not quote Techdirt. You also ignore all of my points.

    “Verizon has every reason to fear network neutrality regulations. They’ve made a massive investment in upgrading their access network, and NN threatens to sieze their network from them and give it to Google, essentially.”

    Again, if the “Americans for Prosperity” piece were true, Verizon wouldn’t have invested in capacity in the first place. Their article is nothing but political rhetoric.

    “and NN threatens to sieze their network from them and give it to Google, essentially.”

    And here you are pretending you’re so concerned about things like accuracy and hyperbole…

    yikes…

  8. Karl, you quote Maslick’s claim that D & T doesn’t even mention net neutrality in your post on DSL Reports. While Maslick certainly says that, you and I both know it’s a lie. Why do you refuse to correct it? You’ve got two pages of hysterical comments related to that lie, so maybe that answers my question.

    Verizon has every reason to fear network neutrality regulations. They’ve made a massive investment in upgrading their access network, and NN threatens to sieze their network from them and give it to Google, essentially.

    And please spare me the song and dance about opposing regulations because you don’t trust politicians. Network neutrality is a horrible idea, full stop, no equivocation needed.

    BTW, D & T has moved the study to http://www.deloitte.com/dtt/cda/doc/content/ustmt2007TechnologyPredictions_160106.pdf

  9. First, your link is dead at 5:40EST. D&L must be having trouble. But yes, I’ve read it several times. I know what it says.

    The D&L prediction doesn’t lay the entire reason for capacity crunch and hesitant investment (in AT&T’s case, that has more to do with nervous investors) at the feet of network neutrality advocates, unlike the “Americans for Prosperity” piece.

    I don’t support network neutrality laws — I doubt the effectiveness, intellect and enforcement willpower of political leadership on the issue. But let’s stop pretending that free-marketeer PR prattle using disingenuous arguments is quality analysis.

    I note that Verizon looks absolutely terrified of network neutrality laws with all the money they’re dumping into fiber capacity…

  10. Om says: “the issue is not that – issue is stop blaming network neutrality for everything.”

    Paul doesn’t address that issue, he’s too busy charging that the people who understand the negative impact of network neutrality regulations on network investment are all paid off; that’s the “astro-turfing” charge the pro-regulation faction makes constantly.

    The facts are that the most visible proponents of network neutrality are paid to support it, from Google’s Vint Cerf to Internet2’s Gary Bachula to Ben Scott of Free Press/Save the Internet. So spare me all that “astro-turf” crap and show me the evidence.

    Whether you increase bandwidth in the core by laying new fiber of mulitplexing (with Infinera boxes or otherwise), it costs money. And whether you increase bandwidth in the access network by running FTTH as Verizon does or fiber to the neighborhood as AT&T does, it costs money. The telcos would like to recoup the costs of access network upgrades by selling high-QoS HDTV streams to their customers, and Google’s anxiety over that is the root cause of this issue. Upgrades to the core are secondary.

    It’s amazing to me that Kapustka (whoever he works for this week – his blog is still up at Pulver Media) has been writing about this issue for nearly a year and still doesn’t understand any of it. Why waste your readers’ time with this nonsensical crap?

  11. Good eye, Paul. ;)

    1/31:
    http://www.dslreports.com/shownews/81331
    http://www.techdirt.com/articles/20070131/171856.shtml

    My primary beef is the pretense that groups like this are “grass roots” or consumer focused when they’re just corporations and executive funded PR tools to rail against government oversight of industry.

    One of my “favorites” is the Heartland Institute, who hides the Tobacco money they receive, then claims they fight for smokers rights and rail against “junk science”:

    http://www.heartland.org/Article.cfm?artId=10594

  12. Richard,

    basically you are entitled to your own opinions. who is denying that video needs bandwidth. the issue is not that – issue is stop blaming network neutrality for everything.

    make a coherent business case, separate the long haul and last mile networks.

    Just to point out, the companies that did not invest in the infrastructure – MCI for example – are the ones who need to upgrade their pipes, and are owned by the opponents of network neutrality.

    by the way paul works for gigaom, not pulver media. as you said, smart analysis and careful going over the facts is hard to come by.

  13. What a sad blog this is.

    First things first, the D & T study is here: http://www.deloitte.com/dtt/cda/doc/content/bgtmtpredictions2007telecoms.pdf

    Read it and then correct your drool.

    The bottom line is this: video needs bandwidth, not just in the core but in the access network. Bandwidth costs money, and somebody has to pay for it. An uncertain regulatory climate makes it difficult for corporations to invest, so the net result of net neutrality is gridlock.

    Anybody who deals with the facts is welcome in this debate, whether they work for activist groups or, as Kapustka does, for Pulver Media. What counts is the quality of the analysis, not the pedigree.

    Om, posts like this one are the main reason I rarely read this blog. I can get gossip, hysteria and spin anywhere, but thoughtful analysis is harder to come by.

  14. Net neutrality is nothing more than an elaborate business negotiation between Google and the ISPs, dressed up as a public policy issue. It’s a nice slogan, but little more than that. Google and other companies are effectively using the “activist anti-industrial” complex as a bullhorn to push their agenda. The telecoms and cablecos are using their own cast of characters. Both sides have paid-for actors as well as a host of “useful idiots” to make their respective cases

    See how their doing it at http://www.thenetneutralityshow.org.

  15. Naptowner

    Level 3 and GC are not the only ones deploying Infinera. XO Communications is also deploying it, and probably how more Infinera gear deployed to date than the other two.

  16. Read the print copy of Forbes tonight and was as disturbed as you and Om are. BUT don’t imply that Kerpen is astroturfing or on the payroll of the Telco’s and then offer no proof. The links to Common Cause’s “Wolves in Sheep’s Clothing” expose make no mention of Kerpen.

  17. Since when has Forbes been “a generally reputable outlet”? The Dan Lyons articles about the SCO-IBM case were some of the most biased and poorly researched pieces of drivel to come out of that debacle.