Matt Sherman notices Stanford University law professor and copyright crusader Larry Lessig expressing doubts about some of the regulatory jihads he’s embraced recently. Lessig admits to being wrong about the Microsoft anti-trust case because it was rendered moot by the relative success of Linux. The professor is less certain he was wrong about net neutrality, but his mind seems to be opening just a bit.
Unfortunately, Lessig is still caught up in a false dichotomy between government-regulated networks vs. government-operated ones:
Those who oppose network-neutrality regulation should also oppose this regulation of last-mile broadband’s most important competitor. Municipal competition won’t kill commercial broadband any more than Linux has killed Windows. Yet it could change the business model of last-mile broadband, just as Linux has changed the business model of Microsoft. If there’s going to be a Linux-like miracle to counteract innovation-threatening broadband business models, then, at a minimum, miracles must not be a crime.
If the only competition AT&T and Verizon had was government-operated networks, their stock would outperform the markets to an extreme degree. In fact, their real competition can really come only from other for-profit companies smart enough to hire good people and develop sensible business plans. The one tip I’d give regulators is not to allow telcos to control too many different media. Licensed WiMax is a big threat to residential broadband over twisted-pair, so it’s best not to allow telcos to have a large piece of that action.
Ultimately, the free market will keep AT&T’s rapacious instincts in check better than any half-baked regulatory scheme, but only if it’s allowed to develop. For that reason, the provision of the AT&T/Bell South merger agreement about WiMax divestiture was good; the rest of it is garbage.