Perspective: Is an 'open' Internet a doomed concept?

Should Congress and regulators keep the Internet "open," or not?

The Supreme Court on Tuesday considered a 9th Circuit Appeals Court ruling that rejected the Federal Communications Commission's decision to spare cable modem service from telecom regulation. When this issue of mandating access for cable broadband competitors is discussed, the debate is usually framed by the question above.

But this is an oversimplified approach. The real question is how to encourage the further build-out of broadband networks. The FCC wants to stimulate broadband investment and once again make the United

The agency may be forced to impose regulations that would deter broadband investment.

States the top nation in broadband usage. We are far from that ranking now, and based on the arguments heard in court, the agency may be forced to impose regulations that would deter broadband investment.

No one involved seriously disputes the value of Internet "openness." The issue is whether the government must mandate openness on cable modem and other networks, or whether openness will occur without such mandates.

Despite dire predictions to the contrary, openness has persisted for the last several years--a point correctly noted by cable and other broadband providers. The more content, applications and devices consumers can use with their broadband connections, the more they will value those connections. In turn, increasing consumer value makes cable companies and others more confident about recouping the high cost of building networks or upgrading customers to higher speeds.

Balancing act
For now, uncertainty reigns, as Congress considers whether to revise the Communications Act.

While defending its policies in court, the FCC will need to address several issues related to broadband. For instance, should new services like voice over Internet Protocol, or VoIP, be regulated? And how should owners of networks recover their costs in areas that are expensive to serve?

During this period of uncertainty, even pro-deregulation policy-makers will be tempted (in part, by companies who supply content, applications and devices) to impose a few openness regulations on network owners. Network owners will then face an uphill rhetorical battle. They will need to explain to skeptics what harm there is in requiring them to safeguard the openness they support and have always provided by dint of basic financial incentives.

Yet it is this same need to maintain financial incentives for network builders that may cause them to rethink their regulatory strategy.

Most openness mandates, by themselves, don't ensure that consumers get the bulk of the benefit created as more devices, content and applications make broadband networks more valuable.

The last thing the broadband world needs is more regulation.

Rather, these mandates shift the benefit from the companies building networks to companies that develop the devices, content and applications.

To reduce the risk that Congress or the FCC will pick winners and losers in this manner, network owners would do well to offer their own voluntary commitments to preserve consumers' freedom to choose the devices, content and applications. In early 2004, former FCC Chairman Powell challenged them to do as much.

Because voluntary approaches can remain agnostic as to which companies benefit most as broadband networks grow in value, they offer the prospect of preserving openness while also preserving critical incentives to invest in broadband infrastructure.

The last thing the broadband world needs is more regulation. That could cast a pall over investment in all sorts of technologies, including wireless broadband and fiber to the home. But given the political context network owners are likely to face in the foreseeable future, they may discover that taking control of their openness destiny voluntarily is better than risking losing control if a mandate is imposed.

Biography
Kyle Dixon is a senior fellow at the Progress & Freedom Foundation. Previously he was broadband adviser at the Federal Communications Commission under former Chairman Michael Powell.

More Perspectives

[Razzl]

Rhetoric can't drive technology

It makes for a very neat rhetorical package to subsume this whole discussion under the clean, astringent term "openness", but technology is messy and scientific facts can sometimes be hard. Right now the FCC seems committed to letting every data transmission method flourish and gets annoyed when phone and cable companies try to point out the limits on how much incompatible traffic their lines can carry, or how much it has to cost to enable that, but they deal with the technical facts. The FCC is setting up the conditions for data transmission failures and insecurities in every medium through their headlong rush to sell off every wavelength in the spectrum that they control. Maintaining the soundness of the infrastructure and giving telecom companies the guaranteed profit they need as incentive to build new infrastructure is an important matter which will come back to haunt us if "oppenness" makes owning cable and phone companies unprofitable.

Open Internet doomed?

Investment is the key word. It is impossible for adults to regulate themselves. The internet is really a wonderful concept as it brings your world and everything in it, right to you. But sad to say, the human animal isn't composed of good only. There is a dark side of us that is so filthy and so evil, that it should never be allowed to be on the internet. If we stick our heads in the sand and think that is just part of life, then we best be prepared to have future generations that accepts all the degradation, evil, demoralizing, hate, corruption that our other half is composed of, and think that is just part of life. I didn't say civilized or humane, for it doesn't enter that segment of life. Yes, my world was zoomed right into my front room. I had no earthy idea that it was so vile. I could well do without it myself.

Forget Brand X, What About Naked DSL?

What effect will the FCC's decision to not require telcos to offer naked DSL have on IP-based services and the cord-cutters who use them?

The Irony of it..

I find it ironic that in the early 90's as broadband technology was beginning to evolve, the Telco's spend much time and effort to block any broadband access to their right of ways to protect their own overpriced monopolies. The "Bells / Baby Bells" forced cable providers to jump through hoops just to get a small right of way on poles and completly shot down any efforts to piggyback on their digital infastructures. So the cables companies invest billions of dollars in a complete digital infrastructure capable of routing high speed broadband services and provide a lower cost, better alternative to the telcos..

Now what happens.. the telcos start to whine and complain to congress that they are not allowed to use the low cost networks of the broadband companies.. they are being held back by regulations and they want more regulations passed to the cable providers and possibly in some areas given right of way to compete on the same digital services..

Heres my 2 cents.. these dirt bag telcos have screwed home and buisness communications for years. Charging large fees with minimal services and almost non-existant digital service enhancements.. it took competetition for them to drop even the price of crappy ISDN services. Most people in this country using a telco for phone are still using analog services over copper.. and where did all this money go over the years instead..? into fat cat pockets so a few select rich people could live nicely and buy/sell telcos as they see fit. Now the money dumps into lobbyist pockets to try to get the governement and FCC to drop tons of regulations and restrictions on cable broadband.

I say these telcos get what they deserve.. its time for death to the bells and new technology to take hold. Send the old snobby rich dirt bags packing.

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Exactly!

My thought (as a competitive Cable company employee [RCN Chicago]) was that we just spent about 800 million dollars to get our network built, and now because the outdated, inherited, networks of the baby bells can't compete, we have to lease out OUR investments?!?!

No thank you.

Besides, My understanding was that we got access to their POTS lines to encourage a competitive landscape. Today that landscape exists, and they want to use our infrastructure because they decided to invest in lobbiests (sp?) in stead of investing in their network and technology.

No, no, no Spank you very much.

Spend your own billion.

Don't regulate Broadband - Regulate MICROSOFT, RIAA, the Movie industry!

The free internet doesn't need regulation. It is Microsoft that needs to have more accountability for it's insider business practices that promote unfair and unjust imbalances in the computer market. The government needs to set security standards that Operating Systems need to meet. I believe Unix/BSD/Llinux supcede high-standards of security. Microsoft is the only company that can become rich and sell crap as a standard in the martketplace. Unknowledgable consumers need protection from a company that takes advantage of the common man's ignorance just like average citizens need protection from terrorist attacks like 9/11 and other encroachments on U.S. soil.

Regulate MICROSOFT, the RIAA, and the Movie industry! Also, the government needs to regulate Gas Prices. Broadband is too easy of a target. I believe special interests want broadband regulated so VoIP users can be charged up the wazoo like we are with phone service! The government needs to be a friend and servant of the people, not Big Money!