[Ecommerce] eBay's Fine Commentary for the FTC Workshop on "Broadband Connectivity Competition Policy"

[Seth Johnson]

(eBay was nearly the only presenter at the FTC's "Broadband
Connectivity" workshop who actually made a specific case for
application innovation as such.  -- Seth)


eBay, Inc.

> http://www.ftc.gov/os/comments/broadbandwrkshop/527031-00053.pdf

For the FTC's "Broadband Connectivity Competition Policy" Workshop:
> http://www.ftc.gov/opp/workshops/broadband/index.html


"Broadband Connectivity Competition Policy Workshop - Comment, Project
No. V070000"

Statement by Tod Cohen, Vice President Government Relations, eBay Inc.

February 14, 2007

     Thank you for having me on this panel today to speak about
competition issues and broadband connectivity. I want to start by
discussing what the issues we are focusing on today are NOT.

     We are not simply talking about "network neutrality." There
are and should remain many networks on which network providers
are free to discriminate based on the source, ownership or
destination of data.

     We are not simply talking about "broadband neutrality."
Providers of broadband networks should also, in many cases,
remain free to discriminate.

     What we are talking about IS "Internet neutrality" -- a
prohibition on discrimination (positive or negative) in
connection to or carriage over the Internet, the interconnected
network or networks that have ALWAYS been neutral and open as a
matter of architecture. And it is the consumer benefits delivered
by the INTERNET -- not by the free-standing closed networks --
that should be our focus.


The panel title speaks of "competition." What "competition"
are we talking about?

     The issue is not primarily about competition between network
providers or even between providers of access to the Internet.

     Yes, that competition is good for consumers, and barriers to
it should be dismantled. Yes, the Internet neutrality problem is
made worse by the fact that so many consumers today have at most
two or sometimes only one way they can access the Internet.

     But no, even if the consumer had three, four or five
competitive means of Internet access, the problem would not be
solved, because each of those network providers would have the
same incentives -- to act as a gatekeeper, to make deals to give
preferential treatment to some data over others, to discriminate.

     The competition that we should focus on is competition among
applications, not networks. And specifically about competition
among the next disruptive applications, the ones that are
unpredictable, the ones that appear inevitable only in the rear
view mirror. I am thinking about innovations like:

     =B7 the World Wide Web, which transformed the Internet from a
       scientific research network to a place where we all go to
       shop, work, learn, play, communicate.

     =B7 peer-to-peer technology, with the promise to truly realize
       the dream of making the distinction between speakers and
       listeners irrelevant -- most recently with Skype.

     =B7 eBay=92s global marketplace itself, which annihilated the
       tyranny of distance in commerce for the first time in
       history and created entire new small business sectors.

     At the time they debuted, it would have been impossible to
know if these innovations could succeed -- only the market could
make that decision. They were also highly disruptive -- ask the
music industry, the local and long-distance telephone companies,
some of the brick-andmortar retailers, the auctioneers, etc.

     The critical point: None of these innovators had to seek
permission from network operators in order to bring their
innovations to millions of people on the Internet.

     They did not have to negotiate. They did not have to
persuade or cajole network operators for special treatment. They
simply made their innovations available so consumers -- not
gatekeepers -- could decide whether they were the greatest thing
since sliced bread or the stupidest gimmick to come down the
pike.

     The network -- the Internet -- was neutral. That was the
starting point that allowed all these non-corporate,
unpredictable, disruptive innovations to launch without anyone=92s
permission, subject only to whether consumers and businesses
would accept or reject them.

     That=92s what is at risk today.


This is a global issue.

     The Internet is global -- a network of networks. Neutrality
is built into it, worldwide. The issue is not closed in by
borders -- innovation without permission should be allowed to
thrive everywhere. All network operators around the world need to
interconnect.

     But more and more countries may find it in their interests
to fragment the global Internet. Erosion of neutrality will make
it easier for that to happen.

     Why would they want to do this? It could be for censorship
reasons; we have seen this happen in China. Or there could be
cultural motivations -- to promote local content by
discriminating against foreign sources.

     Fragmentation is actually rather hard to achieve in the
Internet. But the threat is greatest if neutrality as a
fundamental feature of the Internet is eroded. The policy
decisions we make here in the U.S. will have repercussions
worldwide. So it=92s not just the state of competition in the U.S.
market that is at issue here, but the overall competitiveness of
U.S. applications providers -- and network providers too, for
that matter =96- worldwide.

     At eBay we provide a global marketplace. We are constantly
battling efforts by governments to restrict or constrain the
desires of their citizens to participate in this marketplace. We
don=92t want the U.S. government to send the signal that it is okay
to introduce discrimination into the Internet, because we have a
realistic sense of how some governments will interpret that
signal.

     Abandoning neutrality in the U.S. would be an open
invitation to other countries to do the same -- and would
undercut any efforts by our trade negotiators to prevent
discrimination against U.S. companies.

     Conclusion

     The Internet, which has been a powerful engine for social,
commercial and entrepreneurial progress of historic proportions,
has been an open, neutral network. Everyone involved in this
important public policy discussion should recognize that
prioritization of packets by network operators has NOT been part
of the Internet. Those advocating changing the fundamental
architecture of the Internet in this manner carry the burden of
explaining how the Internet as we know it has failed to deliver
public and societal goods, and also how changing the seamless
global Internet into something that operates more like a series
of private, closed networks would better deliver those goods. It
would be inaccurate and misleading to consumers to call the
proposed new regime the "Internet." Finally, if the change allows
a discriminatory regime to replace the Internet as we know it,
that would be damaging to innovation, competition and free speech
in both in the U.S. and abroad.