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How Net Neutrality Regulation Will Hurt Consumers, Degrade the Internet, Stifle Voices and Kill Innovation

Steven Titch
September 25, 2009, 1:48pm

So, I go out of town for a few days and the government decides to regulate the Internet?

Monday, FCC Chairman Julius Genachowski said the FCC plans to strengthen enforcement of it current four network neutrality guidelines and press to add the controversial “fifth” guideline that would prohibit Internet service providers from applying any network or bandwidth management techniques to improve the quality of Internet services and applications as they cross the network.

Genachowski denies this is regulation, but what else could it be? The FCC proposes to place arbitrary limits on how Internet service providers can use their own property and partner with other companies in the information supply chain. Genachowski will also seek to apply the new rules to the wireless industry, a sector that, beyond spectrum allocation and use, has never been regulated.

While Genachowski says network neutrality is in consumers’ best interest, it’s hard to understand how. With the exception of one instance involving a small ISP four years ago, no phone, cable or Internet company has attempted to systematically block, censor or impede access to a Web site or application. The Comcast-BitTorrent dust-up was largely misreported. Comcast did not block the site or the application; it simply took steps to prevent the small percentage of BitTorrent users from consuming nearly all available bandwidth by slowing the speed of their massive video uploads. Such bandwidth management preserved quality connections for the other 99 percent of Comcast’s customers. BitTorrent even acknowledged Comcast’s right to do so and the two companies worked out an arrangement within weeks.

Net neutrality would prevent agreements like this. And since AT&T, Verizon and Comcast also would be prohibited from charging their biggest corporate bandwidth users for the costs they impose on the network, those costs can only be extracted from consumers in the form of higher rates or slower service. I have no objection to any company using the Web in pursuit of profit, but it’s wrong for the government to set up a regulatory mechanism that allows companies to collect billions of dollars in Web-based revenues while passing the costs of doing so onto me.

Of further irony is idea that network neutrality will preserve Internet diversity and give the lesser capitalized voices equality with corporate behemoths. It’s hard to see this happening when the corporate behemoths are jamming the lines with massive and unstructured media files because the FCC has prohibited any partitioning, compression or grooming so less bandwidth-intensive content can get through without degradation. An unmanaged Internet, consumed by an exaflood, endangers the ease of which smaller Web publishers, bloggers and merchants can reach users.

Finally, the network neutrality is supposed to preserve innovation. That’s highly questionable, especially as more appliances seek to use data applications in complex ways. An underreported story is the amount of infrastructure upgrades and network management functions AT&T has had to implement to accommodate the iPhone’s data-intensive applications. If Genachowski’s proposed Internet regulations were in force two years ago, the iPhone would not have been possible. 

Given what the Internet has become, if starting from scratch, no engineer in his right mind would design the network as neutral, or “best effort,” as it is known in programming circles. Although world-spanning corporate networks use the same transmission protocol as the public Internet, these networks are not neutral. They are designed to manage and partition bandwidth to make sure mission-critical data gets priority. That’s because business depends on it.

I just spent three days at a major security technology conference where hundreds of extremely bright people are trying to deal with the network bandwidth and management problems the growing amount of surveillance video places on enterprise networks. Suggest these companies adopt network neutrality as a solution would get you laughed out of the room. Yet that’s exactly what the FCC commissioner wants to impose on us.

Until now, Genachowski has kept his opinions on network neutrality close to the vest. Frankly, since he is an Internet entrepreneur, I would have thought he would have taken a less aggressive regulatory approach, especially to an idea that risks so many unintended consequences. Plus, many of the companies that a few years ago had been pressing for net neutrality have backed off. These include Microsoft, eBay, Amazon.com, and even Google (which on a certain level realizes that its growth depends on broadband investment that net neutrality would disincent). The network neutrality issue has dwindled to a political agenda supported by a handful of vocal advocates at Moveon.org and Freepress.org. And while these groups may have good intentions behind their support for Internet regulation, the neutrality rules they favor will not result in what they hope for. Quite the contrary, they will lead to higher broadband prices, mediocre service and cede a lot of market power to one segment of the market. In this network neutrality is no different from many of the radical new regulatory programs the Obama administration is introducing to the American economy, be it banking, insurance, auto manufacturing, health care or alternative energy—they allow a select group of favored companies to privatize the gains and socialize the costs. Such programs don’t encourage competition, job growth and entrepreneurship, they impede it.

To sum things up, think of your community pool on a hot summer weekend. It’s crowded with kids and families swimming, playing and splashing every which way, all having a good time. Yet even as all this is allowed, most pools keeps a lane open for men and women who simply want to enjoy a nice swim, something they couldn’t do without a simple partition of rope and floats. Nobody minds, yet those who come for fun, and those who come for exercise, all get to enjoy the water.

The Internet is a fun place to play, and no one wants to interfere with that. But it’s also a place where minority voices can be heard, diversity can be encouraged and business can be done. The Internet needs an adult swim lane. Don’t let the FCC close it.



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