FCC After Network Neutrality Again

Federal Communications Commission (FCC) Chairman Julius Genachowski in a speech yesterday proposed adding two “open Internet principles” to the FCC’s guidelines.

“The Internet is an extraordinary platform for innovation, job creation, investment, and
opportunity. It has unleashed the potential of entrepreneurs and enabled the launch and growth of small businesses across America,” said Chairman Genachowski. “It is vital that we safeguard
the free and open Internet.”

So the game is back on. Genashowski statements reflect the oft-expressed fears of various groups that internet service providers will slow down access to rival’s services, of black access to some content. Internet service companies have already weighed in with a lot of objections.

I’d point out:

a) it only has ever happened once, and it was quickly exposed and ended.

b) why on earth would customers put up with harmful slowdowns or content blocking when they have so many choices of internet service providers?

c) this would prevent all kinds of special internet services, like guaranteed speeds, or a service that offers only family-friendly content and blocks objectionable content, etc.

I could go on. It is a complex issue, explored in great detail by Reason’s Steve Titch in this report. As he points out, the real solution to any possible problems with internet service providers hurting customers by monkeying with their access is competition and choice for consumers, not more micromanaging regulations.

In this column Steve explains why network neutrality is really network mediocrity and that:

Any corporation or individual on the Internet (or anywhere for that matter) has a right to choose what components to make available to whom and on what terms. In commercial language, it translates to the freedom to place a market value on one’s proprietary assets to create viable business plans. That has been the case since the first Internet service provider purchased a rack of servers and started seeking customers for hosted email.

Rather than preserving basic Internet principles, network neutrality subverts them. It replaces cooperation with coercion. It would make government bureaucrats the arbiters of the way two or more companies could agree to use their own network resources to deliver consumers the best experience when it comes to content and applications.

And Reason’s Nick Gilespie has pointed out the obvious way people would react to the problem network neutrality purports to solve.

Let’s assume that the worst fear of a fast-loading page comes true, even for those of us who prefer other, even more fair-and-balanced, less-comical news sources such as, say, The Onion. What are you likely to do in such a situation? At the very least, you’ll bitch and moan to your provider, which is known to have some beneficial effects, even with near-monopolists. Remember what happened to the biggest ISP of them all, AOL, during its rise to dominance a decade or more ago? Originally a closed system, it had to allow its users to e-mail with non-AOL customers, then it had to allow its customers full access to the Internet, then it had to go to flat-rate pricing, then it had to woo subscribers with ever-increasing free hours, giveaways, and the like. AOL still regularly upgrades its system and its services not because it wants to, but because it has to.

Such capitulations to customers are the rule and not the exception among market leaders, whether you’re talking about cyberspace or fast food.


In any case, it’s worth remembering that the Net — most obviously in the form of the World Wide Web — has in large part become a mass phenomenon not in spite of but because of the profit motive. That’s easy to forget in a world in which faster and cheaper broadband, user-friendly interfaces, and e-commerce are no longer considered exotic or risky.

You don’t have to believe that the cable companies and telecoms are kind-hearted altruists to realize they are desperate to get an edge on their competitors. That very desperation is likely to drive innovation that will benefit end users especially. Allowing builders of Internet infrastructure to recoup their investment by charging the Googles and Amazons for use of their network would balance the incentives for innovation more closely. Ironically, a non-neutral net would accelerate the spread of zippy broadband that can deliver movies, allowing hobbyists with camcorders to take on Hollywood studios. The neutrality advocates who criticize corporatized cable TV should welcome that.

Steve has summed it up well:

“Net Neutrality would open the door to unprecedented government intervention in all aspects of the Internet. Placing regulations and legal limits on the Internet won’t bring neutrality, it will stagnate the Web’s remarkable growth. The Internet has been doing splendidly without government, why on earth would we want them involved now?”