Perspective: Watch out we don't neuter the Net

The war raging over so-called Net neutrality has jumped from inside the Beltway to the nation's mass media, if not its consciousness.

Not surprisingly, the Internet--especially the blogosphere--is full of discussions on the fracas. Google the term "Net neutrality" and you'll get something on the order of 21 million entries. Include "blog" in the search request and nearly 6 million entries come back.

With all this back and forth, it's too bad so much of the discourse is uninformed and misleading. As I have explained here before, imposing broad regulatory mandates on broadband Internet service providers as urged by the Net neutrality advocates is a bad idea that will ultimately harm consumers. Rendering broadband providers perfectly neutral by dictating that they be nothing more than dumb pipes, unable to treat any applications or content that use their network facilities in any way differently, would, in fact, neuter the Net.

Take away the freedom to differentiate and the basis for effective competition is undermined.

The nub of the issue is not that complicated. Let me explain.

Broadband Internet access is not currently subject to the type of public utility regulation which, for most of the 20th century, characterized the old Ma Bell and its offspring. Because telephone companies were classified as traditional common carriers, their rates and terms of service were regulated by the Federal Communications Commission. This was appropriate in a narrowband era when the telephone service providers faced minimal or no competition.

But the Internet access marketplace in the broadband era is much different. It's been four years since the FCC determined that the broadband market is sufficiently competitive that it should not be subject to public utility-style regulatory mandates. That's why it is misleading for Net neutrality proponents to sloganeer that neutrality mandates need to be imposed to "save the Internet as we know it." Presently, absent such regulatory intervention, the number and variety of services and applications available on the Net grow exponentially each week.

Indeed, although overlooked by most observers, a full decade ago in the Telecommunications Act of 1996, Congress explicitly stated: "It is the policy of the United States to preserve the vibrant and competitive free market that presently exists for the Internet and other interactive computer services, unfettered by federal or state regulation."

Without doubt, the broadband Internet access market is even more competitive today than when the FCC and Congress issued these pronouncements. Granted, the market may not replicate the classical model of perfect competition--say, the wheat market taught in Economics 101 texts. Few markets do, and certainly no "network" industry requiring huge infrastructure investments running in the billions of dollars ever will. Today, the cable and telephone companies still have dominant market positions. But wireless and satellite companies continue to become stronger competitors. And large electric power companies lurk on the sidelines exerting competitive pressure, already testing delivery of broadband over powerlines.

In this increasingly competitive and technological dynamic marketplace, pleas from Net giants like Google, Yahoo and Microsoft for imposition of strict nondiscrimination obligations and rate regulation of facilities owners are particularly misplaced. Most of the proposals purport to prohibit any network operator from taking any action to "block, impair or degrade" consumers from reaching any lawful Web site. Yet there are no instances today in which consumers are complaining about being blocked from accessing a Web site, and it is difficult to imagine any service provider blocking access to a lawful site. The marketplace reaction likely would be swift and adverse.

As for the "impairing" and "degrading" strictures, there are two very important problems with prohibitions cast this way. First, there will be years of costly litigation over the meaning of these inherently plastic terms as myriad claims of alleged violations are adjudicated and readjudicated as services are rejiggered to try to pass regulatory muster. Second, and more fundamentally, the notion that network facilities owners must treat all applications and content providers alike--that is, neutrally--is at odds with the way we want a competitive marketplace to function. It is through the trial-and-error process of differentiation in the marketplace that new products and services valued by consumers are developed. Take away the freedom to differentiate and the basis for effective competition is undermined.

Strict Net neutrality mandates also mean ordinary Internet users must pay equally for the increased investment required to support some very resource-intensive activities, such as downloading movies or gaming. In effect, this is akin to imposing a retrogressive tax on those less resource-intensive consumers to subsidize sites, such as Google and Yahoo, which are responsible for generating the increased investment necessary to support high-traffic, high-capacity applications.

At bottom, in a world of mandated neutrality, the uncertainty and expense of ongoing litigation, coupled with the inability of network operators to enter into business arrangements that enhance demand by differentiating their offerings, will stifle innovation and investment. The Net will be neutered at the same time it is rendered neutral.

In that vein, henceforth, I suggest use of the term "Net Neut*" in the ongoing debate. That way, at least, the superficial appeal of the "neutrality" label will not be hijacked in the service of imposing a new regulatory regime likely to stall continued development of the Internet for years to come.

Biography
Randolph J. May is president of the Free State Foundation, a Maryland-based think tank. The views expressed here are his own.

More Perspectives

[schubb]

Competition

hehehe, this article is hilarious. More competition? You are joking right? When it gets down to it, competition is a joke. The telco's do not have open lines for competitors, the lines are leased, therefore if AT&T implements QoS, guess what, so did every "competitor" that leases AT&T's lines.

There are few players who can handle bandwidth from the likes of google, MS, yahoo, etc. If they put it in place it doesn't matter if my end has it or not.

[schubb]

Competition

hehehe, this article is hilarious. More competition? You are joking right? When it gets down to it, competition is a joke. The telco's do not have open lines for competitors, the lines are leased, therefore if AT&T implements QoS, guess what, so did every "competitor" that leases AT&T's lines.

There are few players who can handle bandwidth from the likes of google, MS, yahoo, etc. If they put it in place it doesn't matter if my end has it or not.

[ORinSF]

Keep government out of it

Even if you despise the phone & cable companies, the best way to deal with them is via competition. Competition comes when companies are allowed to design and price products as they see fit, and the customer makes the call.

Under neutrality legislation, it would actually be illegal to experiment and differentiate on the network. If everything is a dumb pipe, the only competition is in volume and price. Guess who wins the battle of scale? Hint: the big guys.

We need to keep all technological options on the table. Congress has no idea how the Internet should operate, so let's not give them the power.

[LarryLo]

...and which PR firm do you work for?

Dude, the PR firms trying to make this look grass roots should give back the money their clients give them.....its soooo lame

[curtis1984]

Competition??? ha

The problem is there is NO competition! Most Americans have the choice of one or two broadband companies. How is that competition? If the market was packed with tons of local companies and every American had several (cheap) options to chose from then perhaps you might be right, but as it stands now your way wrong.

[ORinSF]

Keep government out of it

Even if you despise the phone & cable companies, the best way to deal with them is via competition. Competition comes when companies are allowed to design and price products as they see fit, and the customer makes the call.

Under neutrality legislation, it would actually be illegal to experiment and differentiate on the network. If everything is a dumb pipe, the only competition is in volume and price. Guess who wins the battle of scale? Hint: the big guys.

We need to keep all technological options on the table. Congress has no idea how the Internet should operate, so let's not give them the power.

[LarryLo]

...and which PR firm do you work for?

Dude, the PR firms trying to make this look grass roots should give back the money their clients give them.....its soooo lame

[curtis1984]

Competition??? ha

The problem is there is NO competition! Most Americans have the choice of one or two broadband companies. How is that competition? If the market was packed with tons of local companies and every American had several (cheap) options to chose from then perhaps you might be right, but as it stands now your way wrong.

[JulesLt]

W3C, DARPA and CERN

Let's look at the key technologies of the Internet - TCP/IP, the
Internet itself, and HTML - and consider how many of them
evolved out of the wonders of private companies and
competition. That would be none - all of them came from
government funded research programs.

I'd also put more worth on the words of Tim Berners-Lee than
the head of any ISP or Telco. In fact, from my perspective, the
TelCo's did everything they could to hold back the development
of the net. (In the UK, for instance, it took a small private
company to launch the first consumer ISP while the TelCo's tried
to keep people in their own DSL networks).

[JulesLt]

W3C, DARPA and CERN

Let's look at the key technologies of the Internet - TCP/IP, the
Internet itself, and HTML - and consider how many of them
evolved out of the wonders of private companies and
competition. That would be none - all of them came from
government funded research programs.

I'd also put more worth on the words of Tim Berners-Lee than
the head of any ISP or Telco. In fact, from my perspective, the
TelCo's did everything they could to hold back the development
of the net. (In the UK, for instance, it took a small private
company to launch the first consumer ISP while the TelCo's tried
to keep people in their own DSL networks).

[thenet411]

Wrong, wrong, wrong, and easily discredited

This guy is PAID BY THE TELCOS to say this drivel! I urge you all to not fall for this idiocy. What you are reading here is nothing more than what the telcos want you to believe. They paid for this idiot to write this nonsense. Don't believe me? Just take a look at who his clients are!

Not to mention, his idea that ordinary users will have to subsidize the high bandwidth users is nonsense. Google pays tens of thousands of dollars per month for its connectivity all over the world. Microsoft, Yahoo, all do the same.

Do not fall for this, please.

[pokeyzoe]

Who?

Who are his clients?

[thenet411]

Wrong, wrong, wrong, and easily discredited

This guy is PAID BY THE TELCOS to say this drivel! I urge you all to not fall for this idiocy. What you are reading here is nothing more than what the telcos want you to believe. They paid for this idiot to write this nonsense. Don't believe me? Just take a look at who his clients are!

Not to mention, his idea that ordinary users will have to subsidize the high bandwidth users is nonsense. Google pays tens of thousands of dollars per month for its connectivity all over the world. Microsoft, Yahoo, all do the same.

Do not fall for this, please.

[pokeyzoe]

Who?

Who are his clients?

[LarryLo]

Here they go again....

Currently there is no real Competition for Broadband, usually you have 2 choices (DSL or Cable), more often 1 choice. It?s because of this Oligopoly that suddenly the Broadband providers think they have the leverage to suggest the rest of the internet pay their ransom.

I guarantee if you could choose from 4 or 5 broadband providers NO ONE would ever suggest such blatant thievery.

Remind your local Senator or Congressman that Lobbiests might give you money, but they also cost you votes, and come November, hold them accountable to how they handled this.

[LarryLo]

Here they go again....

Currently there is no real Competition for Broadband, usually you have 2 choices (DSL or Cable), more often 1 choice. It?s because of this Oligopoly that suddenly the Broadband providers think they have the leverage to suggest the rest of the internet pay their ransom.

I guarantee if you could choose from 4 or 5 broadband providers NO ONE would ever suggest such blatant thievery.

Remind your local Senator or Congressman that Lobbiests might give you money, but they also cost you votes, and come November, hold them accountable to how they handled this.

[thenet411]

CNET is fully committed to being a corporate whore

This is the last straw. Anyone with a brain can see right through this lunacy. This is corporate drivel. This is not from some unbiased, "I'm on everyman's side!" do-gooder here. Randolph is a corporate *****. This is the second time CNET has dared publish his nonsense and I am oficially saying goodbye to CNET. They were once a really nice place to find tech news. Now, they are nothing more than corporate ******. I urge you all to do the same. What you read on news.com is nothing more than corporate propoganda.

[heizusan]

Seconded...

CNET, as of now, has lost my traffic.

[LarryLo]

CNET EDITORS PLEASE READ THIS

Dear CNET Editor,

We appreciate you are trying to present both sides of the "debate". However I would like to take this opportunity to remind you who your readers are.

We are pretty intelligent (or so I like to think) Technology oriented people, so when a corporate lobby wants to pay you to let them write an article (which I full support cause it keeps you online) At least make them admit who they are, who they are working for, maybe something like the little blurb at the beging of an infomercial. (this is paid programing...yada yada yada)

I am not for silencing them, meaningful dialogue is great, but lets put everything out on the table so as not to insult your readers.

[declan00]

You're not being exactly fair

Nearly all newspapers have op-ed pages where they publish comment from politicians, economists, think tank types, and so on. That's what we do here in what we call a "Perspective" piece. Like a newspaper, we identify the author with a brief blurb.

If anything, CNET would *benefit* at least in the short term from Net neutrality as would other Internet media companies, so I'm not sure why you think we're somehow shilling for the other side. Rather, publishing a variety of opinions is testament to the independence and credibility of News.com.

You can see the rest of our coverage here:
http://search.news.com/search?q=net+neutrality

And yes, if Google's CEO or Yahoo's CEO wants to give us an op-ed on Net neutrality, we'll publish it too.

[thenet411]

CNET is fully committed to being a corporate whore

This is the last straw. Anyone with a brain can see right through this lunacy. This is corporate drivel. This is not from some unbiased, "I'm on everyman's side!" do-gooder here. Randolph is a corporate *****. This is the second time CNET has dared publish his nonsense and I am oficially saying goodbye to CNET. They were once a really nice place to find tech news. Now, they are nothing more than corporate ******. I urge you all to do the same. What you read on news.com is nothing more than corporate propoganda.

[heizusan]

Seconded...

CNET, as of now, has lost my traffic.

[LarryLo]

CNET EDITORS PLEASE READ THIS

Dear CNET Editor,

We appreciate you are trying to present both sides of the "debate". However I would like to take this opportunity to remind you who your readers are.

We are pretty intelligent (or so I like to think) Technology oriented people, so when a corporate lobby wants to pay you to let them write an article (which I full support cause it keeps you online) At least make them admit who they are, who they are working for, maybe something like the little blurb at the beging of an infomercial. (this is paid programing...yada yada yada)

I am not for silencing them, meaningful dialogue is great, but lets put everything out on the table so as not to insult your readers.

[declan00]

You're not being exactly fair

Nearly all newspapers have op-ed pages where they publish comment from politicians, economists, think tank types, and so on. That's what we do here in what we call a "Perspective" piece. Like a newspaper, we identify the author with a brief blurb.

If anything, CNET would *benefit* at least in the short term from Net neutrality as would other Internet media companies, so I'm not sure why you think we're somehow shilling for the other side. Rather, publishing a variety of opinions is testament to the independence and credibility of News.com.

You can see the rest of our coverage here:
http://search.news.com/search?q=net+neutrality

And yes, if Google's CEO or Yahoo's CEO wants to give us an op-ed on Net neutrality, we'll publish it too.

[ORinSF]

Sorry dude

...I am just a lone blogger (www.onlyrepublican.com). No connection to any of the interested parties, just a web developer who wants technology to stay unencumbered by gov't.

Sorry also that you don't care to argue the merits.

[ORinSF]

Sorry dude

...I am just a lone blogger (www.onlyrepublican.com). No connection to any of the interested parties, just a web developer who wants technology to stay unencumbered by gov't.

Sorry also that you don't care to argue the merits.

[heizusan]

No instances of censorship? I call bull...

"Most of the proposals purport to prohibit any network operator
from taking any action to 'block, impair or degrade' consumers
from reaching any lawful Web site. Yet there are no instances
today in which consumers are complaining about being blocked
from accessing a Web site, and it is difficult to imagine any
service provider blocking access to a lawful site."

What about the instance reported last year about a Canadian
telco company? (Where these kinds of regulations were voted
down) Here's the article:

http://www.cbc.ca/story/news/national/2005/07/24/telus-
sites050724.html

Basically, a telco company was fighting some striking union
workers, and *BLOCKED ACCESS* to the strikers' web site. No,
there aren't any examples I know of "today", but then... we
haven't passed the law that the net neutrality laws are fighting
against, either.

[fgoodwin]

Your example is irrelevant to the US debate

How exactly would a US net neutrality law prevent that kind of blocking by a Canadian telephone company?

Unless you can produce an example of a US carrier blocking access, I'd say your example is irrelevant to the US debate.

[heizusan]

No instances of censorship? I call bull...

"Most of the proposals purport to prohibit any network operator
from taking any action to 'block, impair or degrade' consumers
from reaching any lawful Web site. Yet there are no instances
today in which consumers are complaining about being blocked
from accessing a Web site, and it is difficult to imagine any
service provider blocking access to a lawful site."

What about the instance reported last year about a Canadian
telco company? (Where these kinds of regulations were voted
down) Here's the article:

http://www.cbc.ca/story/news/national/2005/07/24/telus-
sites050724.html

Basically, a telco company was fighting some striking union
workers, and *BLOCKED ACCESS* to the strikers' web site. No,
there aren't any examples I know of "today", but then... we
haven't passed the law that the net neutrality laws are fighting
against, either.

[fgoodwin]

Your example is irrelevant to the US debate

How exactly would a US net neutrality law prevent that kind of blocking by a Canadian telephone company?

Unless you can produce an example of a US carrier blocking access, I'd say your example is irrelevant to the US debate.

[aabcdefghij987654321]

True NET neutrality...

is where the *source* or *destination* of traffic doesn't change it's priority or handling within any given network. That doesn't mean that the network can't treat streaming video differently than email traffic, being able to prioritize traffic by type so the most time critical elements travel faster is a good thing.

[aabcdefghij987654321]

True NET neutrality...

is where the *source* or *destination* of traffic doesn't change it's priority or handling within any given network. That doesn't mean that the network can't treat streaming video differently than email traffic, being able to prioritize traffic by type so the most time critical elements travel faster is a good thing.

[JohnnyL]

Most don't seem to understand

Based on the comments I'm reading its apparent that most here don't have a clue about the issues.

What the telcos/pipe owners are telling the content providers is "if you have content that is needs to be delivered fast to the customer, then we can route it down these superfast pipes that we have built at our expense for an extra fee. We'll insure that it has priority handling through the network so that your customer that is paying for this premium content will have an enjoyable experience. If you don't want to pay the extra then it will go down the broadband pipe with everything else. If there is lots of congestion then it may not arrive at your customers properly and the experience fromtheir point of view will not be what they are apying for."

This seems pretty reasonable. The Telcos do not have to do this and thus could treat all traffic the same and route everything through the usual pipes and let traffice pileup and slow down without regard to the content. Frankly, if I'm paying extra to stream some content, then I would hope that the content providers would do what's necessary to insure that it doesn arrive the way its intended.
From my point of view, Google and Yahoo and their ilk are looking to keep their costs down and transfer most of them to the customer.

[schubb]

Sorry, not true

The telecommunications act of 1996 granted the telco's the monopoly power to build those pipes, and $200 billion dollars to do it, and provide broadband to the US. This has not even remotely happened, broadband penetration numbers are skewed. 10 people in 1 zip code, constitutes the entire zip code having broadband.

So my tax dollars built these superfast pipes, not telco money. If you are paying extra, then they should have the bandwidth to deliver. They have built and sold a system that can not handle what we are paying for. BTW I am paying for the experience to download content now.

You seem to be missing the issue, the primary reason they want to QoS the internet is so they can offer their own IPTV, VoIP, and other services cheaper than those already offering. AT&T can offer VoIP, and then limit Vonage and Skype, unless they pay an extra fee. Suddently Vonage is $39.99 to use and AT&T is $29.99, what are most people going to use?

"Sure we sold you 5MB of bandwidth, but we didn't think you would use it," does not seem to be my problem does it?

[LarryLo]

Hmmm.. Me thinks me smells a Telco Bandit

Lets review the talking points, from brother "Johnny"

1. Telco spend money building pipes
2. Its ok to tier Video streaming for a cost
3. Yahoo and crew are trying to transfer the cost to the consumer

Yup Me thinks me smells another Telco Bandit. Why won't they just admit it?

Here is where you argument falls a part, I ALREADY PAY FOR BANDWIDTH!! Period. There IS NO BANDWIDTH SHORTAGE. Other than some of providers ungoddly over subscribtion rates.

THIS IS ALL ABOUT IP TV and streaming video, the telcos want to compete with the Cable companys but don't want competition from anyone else, lest they you pay their toll.

I am sorry but you will never convice the internet users this is a good thing. Just watch this legistation get passed cause people will hold their politicians accountable on this one.

[JohnnyL]

Most don't seem to understand

Based on the comments I'm reading its apparent that most here don't have a clue about the issues.

What the telcos/pipe owners are telling the content providers is "if you have content that is needs to be delivered fast to the customer, then we can route it down these superfast pipes that we have built at our expense for an extra fee. We'll insure that it has priority handling through the network so that your customer that is paying for this premium content will have an enjoyable experience. If you don't want to pay the extra then it will go down the broadband pipe with everything else. If there is lots of congestion then it may not arrive at your customers properly and the experience fromtheir point of view will not be what they are apying for."

This seems pretty reasonable. The Telcos do not have to do this and thus could treat all traffic the same and route everything through the usual pipes and let traffice pileup and slow down without regard to the content. Frankly, if I'm paying extra to stream some content, then I would hope that the content providers would do what's necessary to insure that it doesn arrive the way its intended.
From my point of view, Google and Yahoo and their ilk are looking to keep their costs down and transfer most of them to the customer.

[schubb]

Sorry, not true

The telecommunications act of 1996 granted the telco's the monopoly power to build those pipes, and $200 billion dollars to do it, and provide broadband to the US. This has not even remotely happened, broadband penetration numbers are skewed. 10 people in 1 zip code, constitutes the entire zip code having broadband.

So my tax dollars built these superfast pipes, not telco money. If you are paying extra, then they should have the bandwidth to deliver. They have built and sold a system that can not handle what we are paying for. BTW I am paying for the experience to download content now.

You seem to be missing the issue, the primary reason they want to QoS the internet is so they can offer their own IPTV, VoIP, and other services cheaper than those already offering. AT&T can offer VoIP, and then limit Vonage and Skype, unless they pay an extra fee. Suddently Vonage is $39.99 to use and AT&T is $29.99, what are most people going to use?

"Sure we sold you 5MB of bandwidth, but we didn't think you would use it," does not seem to be my problem does it?

[LarryLo]

Hmmm.. Me thinks me smells a Telco Bandit

Lets review the talking points, from brother "Johnny"

1. Telco spend money building pipes
2. Its ok to tier Video streaming for a cost
3. Yahoo and crew are trying to transfer the cost to the consumer

Yup Me thinks me smells another Telco Bandit. Why won't they just admit it?

Here is where you argument falls a part, I ALREADY PAY FOR BANDWIDTH!! Period. There IS NO BANDWIDTH SHORTAGE. Other than some of providers ungoddly over subscribtion rates.

THIS IS ALL ABOUT IP TV and streaming video, the telcos want to compete with the Cable companys but don't want competition from anyone else, lest they you pay their toll.

I am sorry but you will never convice the internet users this is a good thing. Just watch this legistation get passed cause people will hold their politicians accountable on this one.