“We’ve analyzed their attack, sir, and there is a danger. Should I have your ship standing by?” Commander #1, Star Wars (1977).
Consumers love the Kindle. And what’s not to love? It reads like paper and lets consumers download books using 3G wireless networks with no monthly fees, no annual contracts, and no hunting for free Wi-Fi hotspots. The consumer doesn’t have a billing relationship with the wireless carriers at all; the 3G network costs are instead borne by Amazon, who presumably builds this cost into the price of its e-books. From the consumer perspective, use of the 3G wireless networks is “free.” Consumers love free, which likely explains in part why the Kindle was the “most wished for” and “most popular” holiday gift at Amazon this season.
Despite its popularity with consumers, if the FCC adopts its proposed net neutrality rules, the Kindle’s pricing model could be illegal.
Despite its popularity with consumers, if the FCC adopts its proposed net neutrality rules, the Kindle’s pricing model could be illegal. In the net neutrality NPRM, the FCC proposes to prohibit “discrimination,” which the FCC understands to mean that a service provider may not charge a content or application provider for enhanced or prioritized access to the service provider’s subscribers. Is Amazon receiving enhanced or prioritized access from the network operators? Maybe. It is certainly not clear that the proposed nondiscrimination rule would allow the offering of a “free” broadband service only to users of a particular device (the Kindle) and only when used for a particular purpose (downloading e-books). Even if the Kindle model (i.e., content provider pays) were ultimately determined to be nondiscriminatory, the mere possibility that it could be illegal may be enough to discourage content providers like Amazon from even attempting to employ new, innovative business models.
“Evacuate? In our moment of triumph? I think you overestimate their chances.” Governor Tarkin, Star Wars (1977).
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