Policy + charging

Who's Winning Net Neutrality Debate? Nobody

2:00 PM -- The net neutrality ball is back in the political arena, swatted firmly at Congress by the US Court of Appeals for the District of Columbia Circuit, which today said the Federal Communications Commission (FCC) doesn't have the authority to regulate how Internet service providers manage their networks. (See Net Neutrality Ruling: FCC Loses, Comcast Wins.)

Most big ISPs, including cable and telecom companies, are no doubt thrilled by this ruling, given that the current FCC seems plenty ready to move on establishing net neutrality rules. Such rules could impinge on network operators' ability to prioritize traffic or develop tiered services that generate more revenue by delivering more guaranteed bandwidth. (See FCC Sets Sail on Internet Rulemaking .)

But if Congress does, in fact, decide to take action where net neutrality is concerned, the industry could be in for a longer, messier battle with a less certain outcome.

That's because there are very few things on which the two sides of the net neutrality debate agree. Network operators point to the exaflood of Internet traffic, including tons of high-bandwidth video. That rate of expansion is expected to grow as broadband wireless networks connect more smart devices to the Internet and enable more machine-to-machine connections, or so big ISPs argue.

Pro net neutrality forces scoff at thoughts of network overload, saying instead that the growth of Internet traffic is actually declining. As the cost of equipment continues to ride Moore's Law to lower prices, they maintain, network operators can well afford to increase their capacity to meet demand and stay profitable.

And besides, these are big companies that built their networks on the backs of hard-working ratepayers, right?

My point is that there has been very little movement on either side of this argument, and very little rational debate has gone on as a result. A prolonged political spat is likely to produce delays in use of technological advances in areas such as policy and Deep Packet Inspection, which would enable more efficient and cost-effective use of limited resources, especially wireless spectrum.

This will, in turn, have a chilling effect on innovation within the US broadband community -- something net neutrality advocates say they want to avoid. And yes, there could likely be a period of regulatory uncertainty, which will derail some investment dollars from a skittish Wall Street. This isn't an idle threat, as net neutrality advocates claim. It's happened before and will happen again.

So today's ruling isn't necessarily good news for either side. I personally believe a well informed FCC would be better able to produce a reasonable and limited set of rules to protect consumers from bad behavior by ISPs. Getting back to that point in the process now will take an act of Congress, and I'm less optimistic that this will happen in a timely manner.

— Carol Wilson, Chief Editor, Events, Light Reading

theschnack 12/5/2012 | 4:39:59 PM
re: Who's Winning Net Neutrality Debate? Nobody

Avoiding a Murray Rothbardian dialectic on political economics and how regulatory oversight is invariably gamed for the regulator, your point on policy risk is spot on, and is a critical argument for why the FCC should not be setting out for the Net Neutrality "bogeyman" in the first place.

Regulatory bodies, if they indeed should exist, should take their (implicit or explicit) power to make or break markets as an unfortunate fact, not as a feature. They should wield that power reluctantly, not wave it proudly. They should, to your point, have clear, ennumerated, and limited powers, allowing the regulated to know: 1) whether they are indeed regulated 2) what services they are NOT allowed to perform, under what terms, in the market (in other words, "how to compete"). 3) the process for mediating alleged violations regulations 4) the consequences for being found in violation.

If the above is embraced in spirit, the FCC should very readily cooperate with the marketplace in order to define the rules of the playground, free of monopoly privilege on one hand and cannibalization on the other. This will not scare; this will invite. This will allow providers who want to compete in this market to indeed compete for customers with an unlimited variety of services.

Sure -- easier said than done. But the regulatory body itself needs to clearly desire this outcome before it can expect the "guilty before proven innocent" Service Providers to join what deserves to be an exciting game for all players.

cnwedit 12/5/2012 | 4:39:58 PM
re: Who's Winning Net Neutrality Debate? Nobody I agree, especially with the "guilty before proven innocent" comment. While the FCC and others are preparing to fix problems not yet broken, a whole host of Internet companies are compiling information on individuals for commercial purposes that violate consumer privacy -- that's a fix that's needed now.
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