IPUrbia

The Network Neutrality discussion is bubbling up again in my daily blog readings. It’s a fairly interesting discussion as it is does bear the hallmarks of both the demonstrable (although not unquestioned) need for regulation as well as the perils of regulation. Because of the complexity of the issue, I’ll be dividing the discussion into three sections:

1. Why is Network Neutrality essential?
2. Problems with Network Neutrality?
3. How to achieve Net Neutrality: the regulation question?

The first section will be largely rehash to lay some ground work for the second and third sections which will somewhat question the possibility of Net Neutrality in our current economic and regulatory environment.

Why is Network Neutrality essential?

I think it is perhaps prudent to start out the discussion by at least vaguely defining what Net Neutrality means. For purposes of this discussion, I tend to define Net Neutrality as an environment in which transport providers (carriers, ISPs, etc…) are content neutral: they do not give hinder or favor some types of traffic over another. It is important to note that Net Neutrality is often sometimes used to mistakenly refer to government regulations to force a content-neutral environment; the distinction is critical because regulations are just one approach to achieving and maintaining a neutral Internet.

The first and foremost reason for Net Neutrality is simple freedom of speech. In political terms, this is largely uncontroversial in the United States itself as a principle in terms of transit providers. There have been relatively few incidences of (major) ISPs censuring political or other content on the network layer. On the other hand, many of the content providers–some of the most vocal, and indeed, the very people who do depend on network neutrality–have failed to consistently honor this principle in terms of content that they host; notable examples include hosting companies, fearing legal and other repercussions, taking down sites along the lines of walmartsucks.com as well as the self-censorship of Yahoo, Google and others in order to gain access into foreign markets with regimes more oppressive than the United States. All of the regulations forcing transit providers to be hands-off does nothing if a large donation to a hosting company can sway them to shut off service to a political opponents blog or if, as does happen, private citizens are unable to find a forum to exercise their right to free speech because they don’t have the legal resources of Coca-Cola.

The other major incentive to Net Neutrality, one that does squarely target transit providers, is that of an economically open marketplace. If you want to experience an Internet without Network Neutrality provisions, look no further than the apps in your cell phone which are often restricted or “locked” to services that generate revenue for the cell phone company. While this does result in a more coherent customer experience, it also results in both higher costs to the consumer ($5-$10 a month for applications that are generally available free for PC customers, in addition to data charges, monthly cell phone charges, etc…) as well as a stifling lack of innovation. Real innovation in Internet history has usually come from nowhere with small, nimble companies stumbling into the market place and upstaging the status-quo in a big way. The economic necessity of such innovation is evident in the economic impact Google’s advertising engine, which has been key to the re-emergence of the dot.com economy in the past three years. A controlled, locked down Internet is not only boring and lifeless to end-users–it is economically boring, lifeless, and eventually whithers away to nothing. This is a lesson that has been learned the hard way again and again and one, I fear, that we are doomed to repeat. A quick look at the experience of the transition of AOL and Prodigy from glorified BBSs to ISPs should reinforce this point to the fearful and doubtful; or simply look at the Internet through an ISP portal, take away the Google link, and ask “what if THIS was the Internet in its entirety?”.

Monopolies, by definition, stifle competition and consequently kill innovation that is the characteristic of a free and open active market. The economic nature of telecoms tends to create natural monopolies, as is the case with most infrastructure that is characteristic of utilities (indeed, the plethora of telecom options on a nationwide is reduced to one or two options at best on a local level in most cases). As the Internet for many people is and for the remainder of society is becoming THE forum for social, political, and economic interaction in society, it is vital both to our democratic institutions and our economic systems that these natural monopolies not become vertical monopolies, leveraging their control of the physical infrastructure to control the content of Internet traffic. Failure to prevent such future marginalizes the economic vitality of the Internet for all of us as well as undermines the political vitality of our democratic participation.

Stay tuned for parts two and three, upcoming over the next week…