The Government’s Net Loss | Citizens Against Government Waste

The Government’s Net Loss

The WasteWatcher

Government involvement in the private sector and technology has been a disaster.  The technology industry is a dynamic, fast-moving industry delivering new products to consumers every day and the government is struggling to perform even the most basic tasks such as creating software for a fully functioning e-travel system for the Pentagon (see the story about the Defense Travel System).

Net neutrality and Internet content management provide another example of why the federal government needs to distance itself from over-regulating the technology industry.

Since the advent of the Internet, the system’s speed and utility have grown considerably.  What was once a fun way to look at goofy websites and send e-mail has become an indispensable tool that includes the purchase of goods and services.  One of the growing pains that Internet service providers (ISPs) have experienced is the popularity of downloading music and movies, legally and illegally.

What started out as an innocent way to share music has become a billion dollar industry that has brought the intellectual property rights and Internet traffic management debates to the forefront of public discourse.  One particular growing pain is the proliferation of peer to peer (P2P) networks, which are computer networks connected by the Internet without the need of a server.  In short, these are the mega file sharing entities that take up a lot of bandwidth.

ISPs have been struggling to find a happy co-existence in delivering enough bandwidth for the minimal bandwidth user and the P2P networks.  In fact, one of the largest ISPs in the country, Comcast, and Pando Networks, a leading provider of managed P2P content delivery services announced a “P2P Bill of Rights and Responsibilities.”  According to a joint press release, the purpose of the bill of rights is “to clarify what choices and controls consumers should have when using P2P applications as well as what processes and practices ISPs should use to manage P2P applications running on their networks.”  This is a landmark step in recognizing the popularity and importance of P2Ps while still providing a hassle-free download experience for the casual user.

Meanwhile, the government has been toying with the idea of mandating network neutrality, a.k.a. net neutrality, which is generally defined as a system that allows information on the Internet to move freely without regard to content, destination or source.  In other words, every ISP would provide everything it makes available on the Internet without making any determination that one type of content is either more important or more expensive that any other content.  Net neutrality is based on a false premise that Internet content is being or will be denied to any user.

On May 6, 2008 Rep. Ed Markey (D-Mass.) held a hearing on net neutrality.  What Rep. Markey and others who seek government regulation of the Internet have failed to recognize is that in addition to the Comcast-Pando deal, ISPs have undertaken self-governing measures, such as the “connectivity principles” created by the High Tech Coalition and adopted by the Federal Communications Commission, that have allowed both innovation and investment to flourish.  The burden of premature regulation under the guise of net neutrality could discourage the advancement of high-speed services and the Internet.  It would also create a bureaucratic army of Internet traffic cops costing taxpayers tens of millions of dollars.

Those arguing against Internet regulations say that ISPs wouldn’t dare limit their users’ freedom to surf as they please, since their customers are always one click away from switching to a competing provider.  Those arguing for Internet regulations claim that if ISPs are left to their own devices, they will limit the content or applications their customers are allowed to have.  So far, the dire claims of the pro-regulation advocates have not materialized.  The Internet has remained free and open without regulation.  And during those same years, the number and type of ISPs competing for customers has increased, which both sides believe is the long-term solution for protecting the taxpayers’ interests.   

-- David Williams