Russell's Blog

New. Improved. Stays crunchy in milk.

The Constipated Carrier Model

Posted by Russell on May 03, 2006 at 1:45 p.m.
So, the Markey amendment to the COPE Act failed in the House Energy and Commerce Committee, with 34 voting against and 23 voting for it. So, now the COPE act heads to the House floor. There's still a chance to amend it. Please call your congresswoman (or congressman) and encourage them to support the amendment of the COPE act to preserve the common carrier model (or "network neutrality" as it has been styled in this debate). If you don't know who your congress-critter is, but you know where you live, you can look up your district by map.

Explain to them that AT&T staked its fortune on the idea that it makes sense to charge more for certain kinds of information, and that it makes sense to charge per-minute. The fruits of this idea are obvious. Despite the fact that AT&T started out with the only nation-wide network of sufficient size and sophistication to act as a (stupendously profitable) modern data carrier, their commitment to the pre-World War I era concept of non-uniform pricing and per-minute billing instead drove them into decline and irrelevance. AT&T was once a powerhouse of American innovation, but its leaders failed to understand the basic economics of their own business. By basic, I mean that applying a small lesson from a high school economics class would have permitted them to save AT&T. They could have just picked up a text on economics, and looked up "network economy" in the index. But they didn't, and as a result, one of America's greatest enterprises crashed and burned, taking tens of thousands of jobs and billions of dollars of capital along with it.

So, now AT&T wants to repeat the great success they've had in the last 20 years, but this time with the entire American information economy.

No thank you.

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