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News Release
May 1, 2003
CONTACT: David Fish
(202) 289-8928

Chicken Little Meets the Internet,
Summons FCC
Are We Really Approaching the End of End-to-End?

WASHINGTON, D.C. - Is the end of ‘end-to-end’ near? Should the FCC be dragged into the Internet regulation business in order to preserve ‘net neutrality’? Progress & Freedom Foundation President Raymond L. Gifford says the answer to both questions is ‘no’. In remarks to the Broadband Conference sponsored by the National Association of Regulatory Utility Commissioners in Washington this week, Gifford challenged the notion made popular by Stanford Professor Larry Lessig that, without federal regulation to protect ‘net neutrality’, the Internet’s sky will surely fall.

Bright and well-meaning members of the Chicken Little camp argue for FCC regulation because they fear the open, end-to-end architecture of the Internet is threatened by the transition to Broadband. According to Gifford, they believe vertical integration “will lead to the owners of the physical layer – principally cable plant owners, but presumably DSL providers too – to leverage their market power over the physical layers into control over the logical, applications, and ultimately, the content layer of the Internet.”

Noting that the Hundt, Kennard and Powell FCC’s have resisted regulation with the support of the Clinton and Bush administrations, Gifford supplied four reasons why the bipartisan consensus should continue: (1) There is no monopoly in the provision of broadband. “Even a wanna-be monopolist and vertical integrator cannot climb up the Internet layers to grab monopoly profits,” Gifford told regulators. (2) “It is not clear that a broadband player with physical assets will not be driven to embrace end-to-end, at least as a default option for consumers, by the market.” (3) “The public choice hazards are manifest and high in the Internet space, particularly where the harm is future and speculative and the potential gains from regulatory gaming are high.” (4) “Better laws and institutions already exist to identify, separate and distinguish between good logical layer discrimination and bad logical layer discrimination.”

The Foundation will soon announce a major conference to examine the arguments for and against ‘net neutrality.’ Gifford was the immediate past chairman of the Colorado Public Utilities Commission and a NARUC member.

The Progress & Freedom Foundation is a market-oriented think tank that studies the impact of the digital revolution and its implications for public policy. The Foundation is a 501(c)(3) nonprofit organization founded in 1993.



The Progress & Freedom Foundation