If It Ain’t Broke, Why “Neutralize” It? | Citizens Against Government Waste

If It Ain’t Broke, Why “Neutralize” It?

The WasteWatcher

On September 21, Federal Communications Commission (FCC) Chairman Julius Genachowski proposed new rules for broadband providers.  The so-called “net neutrality” policy is anything but neutral; it would allow for government regulation and intervention in the broadband industry and would prevent wireless companies from managing traffic on the Internet.

The FCC currently has four “guiding principles” for network managers.  These principles call for open access to legal content, choice of applications and personal devices, and easily obtainable service plan information.

Despite fierce competition in the marketplace that has kept prices low and consumer choices plentiful, the FCC wants to implement new rules that would prohibit Internet providers from discriminating or acting as “gatekeepers” of web content.  Among other things, these new rules would prevent broadband providers from offering expedited delivery speeds at higher prices.

Chairman Genachowski plans to codify the four principles and add two more to the list:  a non-discrimination rule that would prohibit providers from selectively blocking or slowing web content or applications, and a transparency rule that would require providers to share network management practices with consumers.  These new net neutrality policies would ensure that all web traffic is treated equally and that providers could not slow access to legal sites or services that consume their networks or are offered by rivals.

The notion of equality on the Internet may sound reasonable, but net neutrality is instead an attack on private sector business models.  Proponents of net neutrality want the online world to be forced “open” at the expense of successful Internet providers, but fail to recognize the many tradeoffs to “openness” such as increased spam, fewer privacy controls, slower service, and perhaps most importantly, decreased incentives for investment and innovation.  Last year, AT&T’s U.S. capital investments totaled $18 billion, the highest of any company.  The looming threat to limit what telecom companies can charge and to whom will undoubtedly discourage the large investments that have helped the Internet expand so rapidly.

The Internet has flourished thus far largely due to the lack of government interference.  Telecom companies have been able to manage Internet traffic to ensure that certain applications do not hog too much bandwidth, slowing access for users.  Last year, however, Comcast was censured by the FCC for violating the agency’s “net neutrality” principles when it slowed traffic for some subscribers who were downloading big files that were clogging the network.  Comcast is currently fighting this unreasonable verdict; providers should be allowed to maintain their networks as necessary to ensure quality service for their customers.

Regulation of the Internet would prevent carriers from managing their own networks, to the extent that curtailing viruses and other harmful content would be restricted.  In areas where there are high concentration of iPhones, like New York and San Francisco, many AT&T customers have already complained about degraded service.  Forcing wireless carriers to open their networks to data-heavy applications like streaming video, graphic-rich games, and movies and music downloads, would only exacerbate the problem, slowing service and potentially causing other disruptions for customers.

The net neutrality debate stems from the ongoing battle between Google and Skype, and telecom and cable providers like Verizon and AT&T.  Companies like Google create applications for the web and want customers to have easy access to their products.  As a result, network owners find now themselves constantly defending their traditional business models from upstarts that wish to free-ride.  Unfortunately, it appears that Google’s unwavering support of the Obama campaign will finally pay off for free-riders everywhere.

Despite all of the hype, consumers are generally happy with their broadband service and only a handful of complaints about net neutrality-like abuses have ever been filed.  This leads to the real crux of the issue:  The FCC should not be trying to fix problems that do not exist.

House Energy and Commerce Committee Chairman Henry Waxman (D-Calif.) plans to co-author a net neutrality bill with Reps. Ed Markey (D-Mass.) and Anna Eshoo (D-Calif.).  Their bill, and the FCC’s new rules, could be fatal for future broadband investment and innovation.

Americans are tired of the government sticking its nose in private business where it does not belong.  The nation has already suffered the consequences of too much government regulation following the collapse of Fannie Mae and Freddie Mac, the takeover of GM, and the Wall Street bailouts.  Congress and the FCC should tread lightly on the net neutrality issue and consider its impact on the broadband industry, or one of the bright lights of the American economy could be switched off.

Erica Gordon

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