When it comes to a question of "How important is this, really?" Net Neutrality usually gets pushed to the side.
Bigger than ISIS? Maybe or maybe not, but not as hair-raising. Bigger than Hillary using her personal email? Absolutely, but not as top-of-mind or intriguing. Bigger than Immigration Reform? Probably not, but interestingly the topics which are involved would play a role in hopefully reducing the influx of illegals by opening up markets more.
Ultimately, it's a kind of boring topic. Which is why I like it, because it involves politics, law and economics. Economics being 'the dismal science', Net Neutrality has often been misconstrued and misunderstood in the media because it doesn't attract much thought beyond a populist angle. After all, most reporters and bloviators who comment on the topic work for companies that will benefit from Net Neutrality. Of course, they were never harmed without it, but hey, these populists are busy looking out for your best interests. Because, of course, nobody else will and you're simply not smart enough to know better. I'll be clear, I work for a company that supports Net Neutrality and conceivably benefits from it. Which is one reason the small level of anonymity which blogging provides is beneficial when writing pieces like this.
The passage, last week, by the FCC of a policy which treats broadband providers as "common carriers" under Title II of the Telecommunications Act basically means they are now utilities. Not completely, but close enough to make that claim without much disagreement. But what sparked this vote, why is it needed (or why do populists feel it is needed), and what does it potentially do?
Oddly, there is no one thing that sparked this debate or the vote itself. There was no overwhelming problem in search of a legal solution. There was a minor business tiff between Netflix and Comcast which was resolved in a positive fashion. It was primarily driven by a non-existent fear that these broadband providers may 'throttle' traffic, based on their whims or - worse yet - the ability of content providers to pay! Shocking stuff. The implication was that Google, or Netflix, could buy so much bandwidth because they had cash, and prevent potential competitors from entering the space. Seems plausible, if you assume that Verizon, Comcast, Cablevision or any of the other broadband providers (which is really only 'last mile' service) aren't actually in some form of competition with Google or Netflix or any other content provider and had a good reason to shut down access to suit their needs
But they are in competition, and regulating the last mile would injure them in the long run, whereas having content providers pay for 'fast lanes' would open avenues for innovation and greater speed for all.
The argument that 'throttling' was a potential problem ignores many issues, of course. For example, the simple problem that 'throttling' happens every day, everywhere, and is essential to managing heavy traffic in confined spaces. The best solution always carries a cost of some kind. The question is what the FCC's solution is to how it will be handled here. With no incentive to develop faster lanes by collecting higher fees, what's the benefit to the broadband providers? All content providers must be treated equally, regardless of ability to pay for faster upload speeds.
Consider these scenarios. I was on a plane this past weekend, and the process of boarding is based on....ABILITY TO PAY! Shocking, I know. But First Class gets on first, then Business, then Economy. Now studies have shown that there are more efficient ways to board a plane. Perhaps the FAA should step in to lower boarding times - getting improved service for all - by shutting down this practice and enforcing the absolute best method? Maybe, but let's consider some other situations. On my way home from the airport, I took a train, and the train ran fine until it reached a portion of track that was shared with Amtrak and Conrail. Since Amtrak runs the 'common carrier' rails, Amtrak and Conrail have first crack at the rails, while commuter lines have to wait. There is no option to bid on access. This obviously wise political solution is clearly one reason rail service has advanced so dramatically over the years, right? Let's consider another, HOV lanes. We've all been stuck in a traffic jam while the HOV lane is open and empty, haven't we? This is clearly an example of the government imposing a "fee" for a fast lane, isn't it? The cost of the extra passengers is what makes HOV lanes work (depending on your definition of the term 'work' and what you think HOV lanes are meant to accomplish).
I have friends who argued that it's not fair if Comcast 'throttles'. "I paid for 5 gigabytes of download speed, they don't have a right to slow me down if I'm downloading a video." That's not precisely true. They aren't slowing down your download speed. They are slowing down the content provider's upload speed. It's a critical point. After all, if a certain content provider becomes so popular that it overwhelms the internet, shouldn't the providers have the right to 'throttle' that content, knowing they have a contract with you that is inviolable? Well, that's what Comcast worked out with Netflix - a contractual solution to a seemingly intractable problem. But the government took this away from them - a business solution is always worse than a political one, isn't it?
What's intriguing is that if all bits and bytes must be treated equally, then how does this vote handle email spam? All providers have throttling of spam, and for good reason. The stuff was clogging the bandwidth. Without some kind of arrangement to manage this stuff, 'free email' was going to overwhelm the pipes. So 'last mile' providers put spam filters on to block as much as they could. Technically, this is now not possible, since all bits should be treated equal. However, there may be carve-outs for certain sectors. We have yet to see.
So the idea that bidding for the option of faster use of constrained space is a bad idea? Well, let's consider that under Title II, the likelihood of innovation is almost non-existent based on history. Yet Tom Wheeler seemed to have a moment of 'clarity' when he 'realized' it could still work and spur innovation, if you look at the wireless providers. This is curious, though. Wireless providers may be innovating like mad, but not in the one area that they are regulated by Title II - voice. Their data is not covered by Title II, and that is where growth is taking place. If he is honest, it seems Wheeler is responding to White House pressure to regulate, particularly since he changed his mind shortly after a White House request to regulate.
Finally, there is the question of whether this actually 'levels the playing field' for new entrants. There was a fear, somewhat warranted, that those content providers with money would pay to choke off access so any potential competitors would need deeper pockets to compete. However, this implies that deep pockets are unavailable and that the only real cost is access to the 'last mile'. Sadly both of these are flawed arguments. Any good idea will find deep pockets somewhere (and many entrepreneurs are hoping to get picked up by Google anyway), but the real cost to a new innovator on the web is infrastructure. Either building it or getting access. Guess who controls the access to infrastructure? Google, Amazon, and the other big companies who supported Net Neutrality. Well, gee, why'd they support it? Out of the kindness of their hearts for the little guy? Heh. Fact is, Net Neutrality allows them to shift their focus from a potential cost center to other areas where now they have more control. Which makes one wonder if it was wise for them to support Neutrality to begin with. In reality, is this just a call for more regulation? Indeed, it is. There is no way this can work without more regulation, and that is the endgame here for Obama, the chance to go after the Googles and Amazons of the world, and the Electronic Frontier Foundation realizes this.
This was hailed as a victory of 'populism over monied interests'. That's bizarre in the extreme. While it's true the broadband providers have strong lobbies and plenty of cash, so did the supporters of Net Neutrality. The only difference is that the Googles of the world realized they could win by keeping their mouth shut and letting it seem like a populist movement. The fact of the matter is this regulation helps nobody, reduces innovation, and is purely politically motivated. I won't predict what the final outcome of this will be. Predictions are hard things to make and rarely meet expectations. But if history is any window, it's clear this is not a good decision and the internet will suffer as a result because the regulations simply won't be enough to make anyone happy.
