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Thoughts on Net Neutrality

August 2, 2006, 2:27 pm

I have had several readers email me asking my opinion on net neutrality, at least as embodied in the regulations passing through Congress.  I really haven't gotten worked up about it one way or the other, but here is where I am on it:

  1. It seems to be solving a "problem" that doesn't exist, but is mostly hypothetical.  So the current benefit of the law is zero.  Which makes the law at best currently useless, and at worst a negative given inevitable unintended consequences.  It seems crafted out of general distrust of phone and cable companies than for any other reason.  Couldn't we at least have waited not just until some company was giving preferential access to certain sites, but until there was some demonstrable harm from the practice?
  2. I dislike the precedent of the government increasing its regulation of the Internet.  I know folks want to argue to me that this law is just to "keep the Internet like it has always been" but that is the justification of half the regulations on the books -- locking the the status quo against new business models, technologies, and competitors
  3. I can imagine situations where net neutrality might be bad.  I think in particular with fledgling wireless networks, that might want to put certain limits on high-bandwidth sites to try to reduce the load on their key nodes.
  4. I know it is not a direct analog, but net neutrality smacks a bit of the awful "must carry" rules applied to cable and satellite.  These must-carry rules were crafted to force people like cable to carry every local TV station, worthy or not, on their cable and to force satellite providers to only bring the network feed to a city via its city's local affiliate.  Another government incumbent protection act, it basically said that incumbent terrestrial broadcasters got first call on cable bandwidth ahead of new entrants.   The sattelite rule has always irritated me - it means that to provide NBC to 60 cities, DirecTV has to carry 60 nearly identical feeds in its limited satellite bandwidth instead of just one, all to protect technologically dated but politically influential local TV businesses. 
  5. Ironically, the same "progressives" pushing net neutrality also pushed, just 6 months ago, legislation to require cable TV to provide content a la carte rather than just one price for everything bundled.  Aren't these two initiatives effectively opposite of one another?  And why is either the government's business?
Tags: , , ,
Category: Regulation
  • http://www.kipesquire.com KipEsquire

    "And why is either the government's business?"

    Um, because the ISPs are government-chartered monopolies?

    To call rate regulation of government-chartered monopolies "regulating the Internet" is a bit disingenuous. And the a la carte cable analogy is wholly inapposite -- people champion a la carte precisely because they don't want most of those 500 channels, but people champion Net Neutrality precisely because they do want those "enormous amounts of material" clogging their "tubes" (and which they, not the content provider, can and will pay for, even under NetNeut).

    The telcos and cable companies deserve no libertarian sympathy whatsoever. Subscribers who use more broadband will pay more -- just like the cellphone industry (which, incidentally, has hardly been "stunted" by its equivalent of NetNeut).

  • Ryan Cupples

    I believe that currently in place IS a very basic form of net neutrality legislation that they want to expand; otherwise it would be in place already. I vaguely recall this fact.

    Anyways, thank you for essentially responding and posting your views. I figured they'd be something of the sort.

  • Matthew

    ISPs do not exist in a competitive environment. Regulation is bad when a market is competitive. When it's not, regulation can be helpful.

    And no websites are high bandwith. They are only high bandwith because customers choose to visit them. And customers already pay for the bandwith they use.

  • Mark Horn

    Aren't their analogous problems with a non-neutral net to the problems of strong property rights without environmental legislation? (See: http://www.coyoteblog.com/coyote_blog/2004/10/libertarianism_.html) Suppose Google is the company that all ISP's want to collect from because they take up so much bandwidth. Doesn't that create a logistical nightmare for google's billing department? How do they manage processing bills from tons of different ISP and verify that those are the correct bills amounts when they don't have any contract with those providers? Won't we end up in "economic gridlock" with google, microsoft, yahoo (et al) getting billed by every Tom, Dick & Harry ISP?

    The answer, of course, is that existing contracts should be enforced. If AT&T doesn't have a contract with google, then they have no basis for billing them - and google should happily ignore the bill. If AT&T subsequently lowers the quality of service to google, then they will lose their own customers who would prefer fast service to google.

    This is fine for most customer/provider contracts, except for the last mile. The last mile of internet connectivity (as previously stated) is not competitive - rather it's a municipal granted monopoly. So, in my opinion, network neutrality, if it makes sense at all, ONLY makes sense for the last mile. The rest of the infrastructure is a competitive market, and network neutrality is not necessary.

    Am I way off base here?

  • Lenny

    To go back to the old highway analagies. Various local and state governments - headed by the same politicians that are pontificating about net "neutrality" - are increasing tolls and the number of toll roads and coming up with all sorts of road pricing schemes.

    There are countless analgies where consumers are expected to be willing to pay more for popular and/or resource limited products or services and countless more analagies where business are expected to pay more to get their products out through premium distribution channels.

    The concept of neutrality has been redefined to mean price controls in this case, and price controls are always a bad idea.

  • Matthew

    Lenny, Google and Amazon and other such popular websites are not "resource limited products". Whether or not you can access Google or Amazon is totally dependent on how good Google's servers and connections are. You are simply tapping into their servers. They already have to pay for their servers. The ISPs aren't paying for Google's web servers.

    If they charge extra for fast access to Google, then that's going to limit their bandwith (which, of course is what they want). They've lived on a business model whereby people typically don't use all of the bandwith they pay for. Now that people are increasingly using more of a product that they are paying for, they want to change the rules so that you can't get your full money's worth.