As the Senate Committee on Commerce, Science and Transportation heads into hearings on network neutrality this morning, I call attention to today's news that Yahoo and eBay have entered into an arrangement whereby Yahoo will be the exclusive third-party provider of all graphical advertisements on the eBay site. For Yahoo, it's a big win against Google, its major competitor.
But it's far from the type of neutrality that Yahoo, eBay and Google are demanding Congress impose on network service providers. Under the Yahoo-eBay arrangement, if you want an ad on eBay, you've got to broker it through Yahoo. I'm not criticizing the deal. On the contrary, it's the way business works. That's why network neutrality is a bad idea. It would prohibit service providers, which own the pipes which carry Yahoo's and eBay's paid advertising, from using similar business models to expand their own broadband opportunities.
The height of this absurdity can be grasped further down in the story. The Journal reports that the two companies will work together to develop "click-to-call" advertising technologies, which will allow a user to click on an ad banner and trigger a VoIP call to the advertiser. This is the exact type of application that can benefit from a level of management above and beyond "best effort" Internet, but that network neutrality would thwart. While a network neutrality law would allow Yahoo to be the exclusive provider of eBay ads, it would prevent a phone company from joining the agreement to guarantee the connection and quality of the VoIP traffic for those click-to-calls.
Network neutrality is not about fast and slow lanes on the Internet. It's amounts to blind, pre-emptive and counterproductive government interference in the nascent market for IP management and optimization. As more deals like Yahoo-eBay's are made, this simple fact will become more apparent. Let's hope the damage isn't done by then.