Friday, February 12, 2016

Common Carriage, Elizabeth I, and the FCC

Common Carriage has been around now for over 500 years in English and in turn American Law. What this means simply is that there exists an entity called the carrier and you enter into a de facto agreement with them to transport your packet from point A to point B for a certain publicly published price. In return for that service as a common carrier the entity has liability only for the cost of carriage if the packet is somehow lost.

Thus if you ship a pound of gold, 16oz is you will, and at $1,200 per oz you have almost $20,000 worth of gold and the carrier charges you $5 a pound, then if it is lost you get $5 back. That is all. If however you are not a common carrier and you loose it you may be sued for both the $20K plus and consequential damages resulting therefrom.

Now in today's debate on Internet Neutrality there are three issues:

1. Wireless: Is wireless somehow protected perforce of their bought and paid for licenses? We have answered No. First the old RBOC go their free as did many of those who "won" license lotteries. Second, there is an issue of ownership versus right to use. What did the carrier get when the auction occurred, ownership or a right to use. We argue the latter.

2. Interconnection: Interconnection is the process of having one carrier deal with another. We have also argued for well over 25 years that interconnection should be mandated at zero price. The factotum of  externalities is nonsense. The French economist Tirole has argued its existence and has tried to justify the incumbents right to compensation. For anyone with a femto second of experience that is utter nonsense. Sock companies cannot charge shoe companies for interconnection!

3. Last Mile: This is the Net Neutrality argument. Namely should each entity connecting to the last mile pay the same rate for carriage as any other? Or can the carrier discriminate? I think when it comes to people we have finally agreed that its is both immoral and illegal to discriminate against anyone. If not we should start now a full policy and legal structure against any form of discrimination. When I buy a loaf of bread it should be the same as anyone else. But the ATTs, Verizon's, Comcasts see the world differently. If they do not like me for some reason they can charge more or even prevent me from buying access at any price. They want to determine what I can get. I don't want to carry the analogy too far but well one can see where this would go. They all have take advantages of Governmental, read from the people, advantages to render their services and make profits. They are or should be common carriers. They should not discriminate.

This is the issue before the FCC. The big guns and deep pockets of the incumbents are out in force. We should watch how this evolves. If it goes the wrong way they we may suffer the consequences.