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« Vonage Sucker Punch | Main | Podcast: Instapundit - The Glen and Helen Show: Andy Kessler on the Revolution in Medicine »

June 18, 2006

Comments

EAN

I'm buying into "The Internet" which means a transparent network between end nodes - anything less is consumer fraud. Go ahead and get the Nuvo-AOL, just don't sell it as "The Internet" because it isn't anymore. Besides this is nothing new, the carriers (ITU/CCITT) have been trying to steal the Internet since they noticed it was worth anything. Time to break up the monopoly again, and keep it busted this time. Why do I not have a choice among service providers? My experience of service providers is that of a monopoly, and I know that it has been arranged to be just that way - ask John McCain. A vote for John McCain is a vote to screw your Internet - don't do it!

Phillip

Andy,

I have read your first two books. They are very entertaining. You are clearly a smart guy, although it is always easy to make money in a bull market, especially that bull market, the real wheat gets separated from the chaff with investment managers is in a bear market. It is great you got out of the market when you did, but that is really not managing money.

A few comments on your net neutrality article.

1) I think one of the things that the RBOCs want is the ability to charge for a tiered service. i.e. Internet companies have the option to pay more for a higher bandwidth service to the customer. There is some logic to this. It is not necessarily charging Google 5% of its advertising revenue.

2) What about their massive loss of telephony revenues? What if telephony pricing goes to zero? How will they offset these revenues and at the same time continue to push fiber closer to the home? As you know there is a great investor debate as to whether Verizon's investment in FiOS will actually earn an appropriate ROI. The jury is still out.

3) Great, France has lower cost Internet access... but, as you know it is completely different regulatory and market environment. Average telephone bills in France are not low, the incumbent still generates a very high all in revenue per each household.

4) I think your focus on the monopoly power of incumbents, although still true, is precisely coming apart at the seems, which is the reason for this debate about network neutrality came about in the first place and the reason that Whitacre made the comments he did... he is feeling the pressure. In one instant you are talking about Skype and the next you are saying "what market?".... yes they control the pipes, but they also have to pay to upgrade them..

5) Come on.... your argument saying that the telecos are asking for a guarantee on their investments by bringing in all this stuff up about Intel and chips.... this has nothing to do with the argument. No one restricted the chip manufactures on how they could price or charge for their products, as network neutrality is attempting to do...

In the end there probably has to be some kind of new economic or commerical agreement between the network providers and the Internet companies, or it will become interesting in a couple of years when the networks reach capacity if HDTV streaming becomes big...

A concept that your readers may also want to look into is the concept of "viral networks" and the possiblity that this will provide new competing networks...

Andy Freeman

> ) I think one of the things that the RBOCs want is the ability to charge for a tiered service. i.e. Internet companies have the option to pay more for a higher bandwidth service to the customer. There is some logic to this.

And they already charge more for more bandwidth. They don't need any changes to continue to do so.

> It is not necessarily charging Google 5% of its advertising revenue.

Since charging Google a cut of its revenue is the example that the telcos use, that statement lacks a crucial connection to reality.

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