The Prepaid Press - March 15, 2008 - (Page 4)

PREPAID BUSINESS March 15 · 2008 - 4 THE RETSKE REPORT By Gene Retske Net Neutrality There is a debate raging in Congress, at the FCC and in the media over control of the Internet. It is a complex issue, and parsing the issues and players is not an easy task. The real issue is relatively simple, but given the red hot political cycle we are in, the Internet issue will undoubtedly be spun and nuanced until it is unrecognizable. As with many issues, desirable sounding platitudes are applied to the arguments, often to give the opposite impression of what they would really do. In this case, most everybody is in agreement as to the goal (although not all, as we will see), it is how to achieve that goal that is at the heart of the dispute. The issue of Net Neutrality, as it has been called, has arisen as the importance of the Internet has increased. Since the Internet is an element, in varying degrees, of every prepaid service from calling cards to gift cards, any change in the way the Internet operates or is paid for, will have an impact. The issue was brought to the forefront by the nation’s second largest Internet provider, Comcast. It estimated that half of its bandwidth was being taken up by illegal video file sharing. Providers of these services pay for the bandwidth to get unto the backbone, but not for the use of the backbone itself. So, Comcast, without telling its subscribers, introduced a technical fix, that slowed down peerto-peer downloads severely. The resultant consumer backlash gave rise to the idea of “Net Neutrality,” a simple, compelling promise -- make it illegal to discriminate in the provision of bandwidth. Congressman Edward Markey (D-MA) has introduced a bill in the House that would forbid network operators from favoring one application over another, and would authorize the FCC to enforce the provisions. As we said at the start, nearly everyone likes the idea of a neutral Internet, the debate is over how to get there. AT&T, Comcast and the big Internet ISPs are arguing against the Net Neutrality bill, but refuse to agree not to discriminate, or “shape traffic,” as they call it. Congressional leaders, in an election year, are talking about Net Neutrality, which has a populist ring to it. So, what is wrong with legislation setting out the rules? Well, for starters, laws never solve any problem, or stop any activity. Passing a law against murder does not stop people from killing other people. To assure that neutrality is being obeyed, the FCC would have to create a whole new regulatory and monitoring regime. Since the Internet is a high tech structure, the rules for neutrality would be Since the Internet is an element, in varying degrees, of every prepaid service from calling cards to gift cards, any change in the way the Internet operates or is paid for, will have an impact. lengthy, complex and incomprehensible to mere mortals. These rules would likely surpass the voluminous IRS rules in short order. Communications lawyers would prosper by virtue of all the new rules that have to be written, enforced and litigated. In the meantime, innovation on the Internet would likely atrophy as the “suits” fight over the details. The strength of the Internet has been its ability to let free markets make the decisions. A Net Neutrality bill would put the decisions in the hands of federal bureaucrats, which makes many of us shudder. To be in favor of having Net Neutrality laws, you have to believe in the ability of government bureaucrats to effectively regulate anything. But, to be against it, you have to trust that for-profit corporations will put their self-interests on the side, and do what is best for everyone. What is the alternative? Let free markets and competition decide. This strategy has worked since the beginning of the Internet, which has done very well, thank you, without the federal bureaucracy involved. In fact, it is this absence of political influence and oversight that has made the Internet what it is today. The fact that so many politicians desperately want control over the Internet should give pause in itself. IF You Need a Quality Card Supplier Since 1996, Pentagon has specialized in producing cards that exceed our clients’ needs and expectations. We offer our clients: Standard or high resolution (DOD) ink jet Secure scratch off (customizable label or slurry ) HiCo & LoCo magnetic stripe Single and batch wrapping (customizable) Three track encoding Commercial (POS) printing Customized packaging Fulfillment Tipping Quality Security On Time Delivery. For starters, laws never solve any problem, or stop any activity. Passing a law against murder does not stop people from killing other people. Existing FCC rules about full disclosure of service details would mitigate against Comcast-like concealment of traffic discrimination. Then, with enough competitive alternatives, consumers could decide if they want ISPs to monkey around with their traffic or not, and vote with their dollars. To make this work, however, consumers need a wide range of alternatives, which most do not have today. How can a lack of Internet access alternatives be fixed? Andy Kessler offered a suggestion in the February 25, 2008 issue of the Wall Street Journal: “We need policy to help cut a path for more competition, rather than protecting incumbents -a Bandwidth Competition Act of 2008, not bogus net neutrality. All takers should be allowed access to poles or underground conduits. This is where neutrality should be enforced, instead of being a choke point.” There’s a solution that is in the best tradition of American free enterprise. We don’t even need legislation; the biggest ISPs could just go ahead and agree to competitive pole attachments on their own. But, Comcast and AT&T, be forewarned, if you don’t act, government may soon act for you, and you know how that usually ends up! www.pentagon.ca 877-339-5995 ideas@pentagon.ca http://www.pentagon.ca http://www.pentagon.ca

Table of Contents Feed for the Digital Edition of The Prepaid Press - March 2008

The Prepaid Press - March 2008 tppEXPO’08 Slated for August 19-21 AT&T Strikes Back Contents The Retske Report: Net Neutrality 5 Minutes With Terry Maher, NBPCA Counsel Regulatory Rundown: FCC Enforcements Prepaid Wireless Roundup Prepaid Wireless in Brief tppEXPO’08 Spotlight BlackBerry Prepaid Option to be Offered Virgin Mobile USA Ringbacks Growing The Splitting of a Titan The State of Prepaid Technology: Part II – The Other Prepaid Calling Spot Rates Calling Cards in Brief IVR and Stratus to Offer SIP Platform PhoenixSoft Completes Integrated IP Transcoding The Legal Line Web Streamlines Bill Pay & Prepaid Distribution Travelex Debuts New Foreign Currency Packs TSYS and Telrock to Provide Mobile Solutions Payments in Brief NBPCA Offers Tips to Fight Money Laundering Hypercom Responds to Ingenico Inquiry Kiosks Change the Face of Prepaid Prepaid 101: Prepaid Wireless Coinstar to Expand Centers in Wal-Mart Locations Meta and MoneyGram Partner NRF Battles Retail Crime Retail Focus in Brief Our Advertisers Contact Us

The Prepaid Press - March 2008

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