Hand Off the Internet
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Hands Off the Net
Congress wisely resists the urge to regulate cyberspace.
Brian C. Anderson
28 June 2006
It's a good thing that Congress seems to recognizefor nowthat
regulating the Internet is an acute danger to free political speech
in America. Thanks primarily to Republican efforts, both the House
and (narrowly) the Senate have fought back a push to establish in
law the principle of "network neutrality," a roster of whose
supportersfrom Hillary Clinton, MoveOn.org, and the New York Times
editorial board on the left to the Christian Coalition on the right
includes some of the nation's leading advocates for government
regulation of the media.
What ignited the controversy is the possibility that the information
bits that make up Internet traffic will no longer enjoy first-come,
first-serve treatment, as has generally been the case until now.
Freed up by recent Supreme Court and FCC rulings, broadband firms
want to manage more actively the data pulsing through their conduits
their cables, fiber optics, phone lines, or wireless connections
offering, for instance, new ultra-fast delivery for sites willing to
pay extra, just as FedEx accelerates delivery of packages for a fee.
They might offer as well their own additional services, such as
online video or telephony, as part of the package.
These changes, critics claim, will wreck the Internet. From an open
commons where surfers can access all sites on egalitarian terms, the
Net will become a world of "walled gardens," where "broadband
barons" favor certain content (their own) and impede sites unwilling
to pay high fees or selling competitors' products or supporting
controversial political views. To stop this, the reformers,
organized in a "Save the Internet" campaign, wanted Congress to
force Internet providers like Verizon not to "discriminate among
different types of traffic based on the traffic's source,
destination, or content," in the words of Net theorist David
In truth, however, mandated net neutrality is completely
unnecessary. For the telecoms to become site-obstructing bullies
would be an odd business model, explains tech guru George Gilder of
the Discovery Institute. "The providers have no incentive to kick
anybody out," he says. "They want to get as much content as possible
on their conduit. That's what attracts customers." This is why
bloggers shouldn't fear that differentiated service will prove an
enemy of openness.
Competition will give providers a positive incentive to stay honest.
Say Verizon wants to charge Amazon oodles to join the fast lane, and
Amazon refuses. Verizon could boot Amazon off its network in
retaliation. But zillions of Amazon fans would jump ship to another
supplier. "The market works these things out, as it should," advises
regulatory theorist Peter Huber. But meanwhile, many Internet giants
like Amazon and Google are backing neutrality, because they don't
want to pay any more for bandwidth, whichto match fast lane rivals
they'll have to in a non-neutral regime.
Political censorship is equally improbable. Christian Coalition
president Roberta Combs worries that, without enforced
neutrality, "a cable company with a pro-choice board of directors
could decide that it doesn't like a pro-life organization using its
high-speed network to encourage pro-life activities"and silence
it. "Sure, it would be legal [to block access]," retorts Tim Lee, a
contributor to the libertarian Technology Liberation Front
blog. "But it would also be commercial suicide, as millions of irate
pro-lifers would switch to their local Baby Bell and call their
Ah, but there's the rub, would-be regulators say. The Coalition of
Broadband Users and Innovators, a group including Amazon, eBay, and
other Net firms, claims that the broadband market is an entrenched
cable/telephone "duopoly" that allows network owners "to infringe or
encumber the relationships among their customers or between their
customers and destinations on the Internet." "There's nowhere else
for consumers to turn," frets the Save the Internet site. Without
new regulations, the broadband barons will conspire to control the
Web for their own selfish ends.
Yet as Gilder observes, "the broadband market is one of the most
competitive arenas in the world economy." FCC numbers show that
around nine out of ten U.S. zip codes have two or more broadband
providers (and duopolies can be very competitive); 60 percent have
four or moreand the rivalry for the digital "last mile" into the
home or office is getting fiercer. "In some suburbs, you now have a
cable supplier, maybe two, you have the telephone company, you've
got WiMax, you have various brands of satellite, WiFi, on and on,"
enthuses Gilder. Competition is a key reason, a Pew study finds,
that 42 percent of Americans enjoy broadband access, up from 30
percent only a year ago. After a telecom price war drove down
monthly broadband rates, middle-class and working households in
particular signed up in droves.
A neutrality law would dampen this healthy competition. "Without
neutrality," Vanderbilt law prof Christopher Yoo, a leading thinker
on Net regulations, informs me, "providers could compete on quality
of service, giving, say, voice communications a higher priority to
make Internet telephony work better, or they could boost the
security features of the network, in each case targeting a smaller
subset of the market, like specialty stores in a world dominated by
larger, efficient stores offering one-stop shopping." A neutrality
law, forcing all traffic to be treated the same, would transform
broadband into a kind of commodity. "That would favor the largest
firms, those with the largest economies of scale," elaborates
Heritage Foundation telecom expert James Gattuso. Challengers
especially tiny oneswould have a hard time getting into the market.
Given today's bandwidth scarcitythe U.S. still lags far behind
South Korea and many other nations in bandwidth per capita, despite
all the competitionit's more rational to use prices to allocate the
resource efficiently. "While someone sending personal e-mail may be
perfectly fine with an occasional delay of a few seconds," Gattuso
says, "delay could be deadly if a hospital or health care provider
was sending vital medical information." Creating Internet "lanes"
with the fast lanes costing morehelps solve this problem.
Neutrality fans like to tout the innovation in Web services that the
Internet's first-come, first-serve approach to data has encouraged.
A neutral Net would function like the electricity grid, argue
University of Virginia professor Tim Wu and Stanford Law's Lawrence
Lessig in a joint letter to the FCC. "The electronics industry
designs new and better electronics, safe in the assumption that
American electricity will be provided without preference for certain
brands or products." Similarly, Web innovators will be more likely
to launch the next eBayand find investors for itknowing that all
Internet conduits are equally open to them.
But that argument mistakenly assumes that the Net's infrastructure
doesn't need constant and ample investment to upgradeso that it
does not end up in as poor shape as the electricity grid. As
Bernstein Research's Craig Moffett testified to the Senate in March,
despite billions in capital spending, "our telecommunications
infrastructure is woefully unprepared for widespread delivery of
advanced servicesespecially videoover the Internet." Verizon
anticipates that the typical Web surfer, who today uses two gigs of
data monthly, will use 100 times that a decade from now, as he
downloads high-definition movies and TV, music, and games. "Today's
networks simply aren't scaled for that," Moffett reports.
Yet if government busybodies keep networks from tapping new revenue,
forget about new investment. "A net neutrality measure would just
put a stop to it," Gilder predicts. As it is, Bernstein's Moffett
notes, Wall Street is getting leery of network capital outlays.
Verizon's stock limped throughout 2005, for instance, "due to the
capital markets' distaste for the expensive capital investments in
[the firm's] . . . fiber optic deployment," he says. Uncertainty
about the regulatory future is a major reason for Wall Street's
gloom. As the Progress and Freedom Foundation's Adam Theirer
suggests, enforced neutrality "would essentially tell infrastructure
operators and potential future operators of high-speed networks your
networks are yours in name only and the larger community of Internet
usersthrough the FCC or other regulatory bodieswill be free to set
the parameters of how your infrastructure will be used in the
future." Not a business to bet on. And so, with ever more
information surging through the Internet's overburdened pipes, such
infrastructure socialism would mean a big slowdown.
Net neutrality would swiftly become a bureaucratic
nightmare. "Neutrality regulation might as well have been labeled
the `Telecom Lawyer & Lobbyist Full Employment Act of 2006' because
it would generate mountains of regulation and litigation in coming
years," says Theirer. "You simply can't put something as amorphous
as `digital nondiscrimination' mandates on the books and then expect
that regulators won't abuse itand that means competing teams of
lawyers, consultants, and economists will be hired to try to figure
it all out. When they don't, the lawsuits will start flying."
There's no guarantee that the quest for neutrality would stop with
the providers, either. The educational site KinderStart has just
slapped a lawsuit on Google for downgrading its page rank. Because
of its prominence, the suit argues, Google has become an "essential
facility," and thus should face government review for fairness.
Welcome to the newest right, says tech writer James DeLong: "search
engine neutrality." Of course, the arguments made against Google's
freedom to run its business are analogous to those Google is now
making against the telecoms.
The biggest reason to be thankful Congress resisted net neutrality:
the scary prospect of Ted Kennedy and Nancy Pelosi trying to stamp
out broadband traffic "discrimination." Some of the most vocal
neutrality advocates, including Save the Internet campaign organizer
Free Press, relentlessly agitate for regulation of other media to
fight "corporate interests" and guarantee "fairness." The deeper
agenda at work in the net neutrality debate, insufficiently noticed
by most commentators, is the Left's zeal to get a hold of the new
media, which have given conservative voices powerful outlets,
shattering the liberal monopoly over news and opinion outletsand
regulate those outlets out of existence, so we can all go back to
the days when the New York Times and other elite liberal
institutions set the agenda.
It's thus not hard to imagine a network neutrality law as the first
step toward a Web fairness doctrine, with government trying to
micromanage traffic flows to secure "equal treatment" of opposing
viewpoints (read: making sure all those noisy right-wingers get put
back in their place). European Union advisory bodies have already
called for such a rule, potentially forcing all opinion sites
viewable in Europefrom tiny blogs to big news organizationsto post
opposing opinions or face fines.
It's not primarily the telecoms and cable companies we should worry
about as threats to Internet freedom. It's the government
regulators. Should Democrats regain control of Congress, expect
another drive to police the Web.
Copyright The Manhattan Institute