Out of Control Policy Blog

Put a Fork In It

Network Neutrality remains a regulatory idea that just won’t die.

After having failed to advance legislation in the last two sessions, the progressive lawmakers currently running Congress now hope to push the regulatory initiative over to the FCC. Language in the stimulus bill calls on the departments of Commerce and Agriculture, which are charged will allocating $7.2 billion in broadband stimulus funds, to respect any and all conditions the FCC chooses to impose on stimulus recipients —including a network neutrality mandate.

The only impediment to potential Internet regulation is a ticking clock. Broadband stimulus funds are supposed to begin flowing this summer. While a new FCC chairman, Julius Genachowski, has been nominated, his confirmation has not been scheduled. And since it is unlikely any significant policy change will go forward without a chairman in place, broadband grants may begin to go out before the FCC weighs in.

This would be a good thing. Remember that the FCC already has four of the five so-called network neutrality principles in place. They are relatively meaningless, in that they essentially require an Internet Service Provider to, well, provide Internet service. The fifth and most controversial principle, which currently is not among the FCC guidelines, prohibits ISPs from managing or improving the speed, quality or interaction of Internet applications as they cross the network.

As I report in my policy study “The Internet is Not Neutral (And No Law Can Make it So)" published last Thursday, large Internet applications providers—Google, Yahoo, Microsoft, Sony, Amazon, Disney and so on—already use technology and processes that speed delivery and generally enhance user experience. There’s an entire industry sub-sector devoted to providing these types of solutions. If not, none of these sites would be remotely viable.

All network neutrality regulation would do would be to prohibit ISPs from tapping a revenue stream that could offset the cost of delivering broadband to consumers.

But let’s get beyond this. The network neutrality debate has been going full tilt for at least five years. From the beginning, neutrality proponents said regulations were needed because without them, companies like AT&T, Verizon and Comcast would control the Internet. It’s mid-2009 and that hasn’t happened. Internet use continues to explode along with bandwidth and applications, and yet neutrality proponents still can’t answer the fundamental challenge free marketers issued years ago: Where is the consumer harm that justifies such drastic, pre-emptive market regulation? The one example remains Madison River Communications, a small ISP which in 2005 got caught and was fined for blocking a rival VoIP application. “Got caught and was fined” are the operative words here.

My report brings together the many reasons why mandated network neutrality is a bad idea. But for would-be regulators, the elephant in the room is the fact that since Madison River, no one has complained that an ISP has used its so-called control of the local bottleneck to block traffic or censor content. The Comcast-BitTorrent controversy was rightfully recognized, by BitTorrent no less, as an instance of Comcast protecting its own property and the quality of its own service, and the two companies worked out an arrangement through market mechanisms. Isolated cases of censorship were outside of ISP control and quickly remedied. Bottom line: the lack of mandated neutrality has not led to systemic abuse of their position in the broadband supply chain. My report also shows why—they simply don’t have the arbitrary power some critics believe they have.

So it’s time to stick a fork in network neutrality policy. It's done. The logical disconnect in “progressive” policy is beginning to show. Please reconcile this: Rep. Ed Markey (D-MA), as a leading advocate of network neutrality, supports his position by arguing that without it, the Internet will never become a popular, diverse and powerful source of information. Yet the same Markey has called for a government newspaper bailout and supports his position by arguing the exact opposite. The Internet, he says, is such a popular, diverse and powerful source of information that it unfairly hurts print publishers.

We free-marketers might smile at the inherent contradictions beneath the progressive tech policies being touted on Capitol Hill, and we know much of these efforts will be frustrated simply because the pace of technology change moves faster than the government’s ability to regulate it. Policymakers can't make up their mind. Is the Internet still so vulnerable either needs that it needs government protection? Or the Internet is so pervasive that we all need to be protected from it?

Neither. What we consumers really need is protection from technology regulation. The Internet and the Web have been going gangbusters for nearly two decades without government “help.” Let’s not wreck it. Scrapping net neutrality talk is a great place to start.


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