Net neutrality debate can be resolved without return to 1930s regulation

12 Nov Net neutrality debate can be resolved without return to 1930s regulation

MADISON – By any standard, the Internet ranks as one of the leading innovations of our time. It has revolutionized everything from commerce to medicine to entertainment, all within the confines of a generation.

Better yet, it has done so largely without government regulation. So, why would President Obama think now is the time to turn back the clock to Depression-era rules written when all telephones were black, hard-wired and hung on a wall?

Obama said this week he believes high-speed Internet service providers should be regulated through “the strongest possible rules to protect net neutrality,” thus endorsing a proposal to empower the Federal Communications Commission to require Internet service providers to treat all web traffic equally and not charge content providers for better access.

The FCC is debating whether Internet service providers, such as Verizon and Comcast, can choose to block or prioritize delivering traffic to certain websites. That policy is under consideration because a federal appeals court decision in January struck down rules that barred companies from doing so.

While the FCC appeared on course for a hybrid rule to charge broadband “hogs” while protecting small users, Obama has proposed to take it a new – or, more accurately, old – regulatory level. He wants to reclassify ISPs are common carriers under Title II of the 1934 Telecommunications Act, treating the service as a public utility.

This is the same overly broad approach to regulation that spawned the old Ma Bell oligarchy and stifled telecom innovation for generations – until the Internet basically changed everything by coloring outside the lines.

“Net neutrality” is one of those buzzwords that inspires populist support, but it’s not as simple as the big guys conspiring to shove mom-and-pop websites into the Internet’s slow lane.

Behind the scenes, it’s also about a small handful of heavy users – the Internet’s so-called “lane hogs” – hoping to avoid paying for the right to dominate available capacity.

Internet capacity today is being driven by video in its many forms, not voice, text or website traffic. Video consumes huge amounts of Internet capacity and most ISPs are struggling to keep up through investments in wireless networks and other backbone services.

Remember when Netflix Inc. delivered videos by mail? Today, Netflix and similar services are accommodating customers through the Internet – and gobbling up capacity in the process. With 37 million U.S. subscribers, Netflix alone generates about one-third of U.S. online traffic during the evening hours on weekdays.

Netflix pays Comcast, Verizon and AT&T undisclosed fees for a more direct connection to their networks, an arrangement that could become unnecessary if Obama’s recommendation is adopted by the FCC.

No wonder Netflix is leading the charge for … you guessed it… “net neutrality.”

There are Internet corporate elephants on both sides of the debate, of course, so entrepreneurs are rightfully worried about not getting trampled in the tall grass. If the Internet had not been free and relatively open over the past 20-plus years, entrepreneurs may well have been deterred from creating a wide array of services and products. That kind of innovation has transformed the economy and created millions of jobs.

The Internet is one of the uniquely American innovations of the last quarter century. It has functioned pretty well so far with light-touch regulation and self-policing functions.

In fact, most Internet governance is currently restricted to a non-profit, multinational body based in California. The Internet Corporation for Assigned Names and Numbers maintains a host of technical standards, which allows traffic to flow throughout the global communications network. ICANN is a private organization with an international board of directors, but there is already some oversight by Washington because it’s a U.S.-based corporation.

The FCC issued an Open Internet Policy Statement in 2005, and followed that in 2010 with Open Internet Rules. It seems unlikely the FCC would reverse its general approach to Internet openness – which makes the president’s post-election call for more heavy-handed regulation all the more curious.

If you want less of something, tax it or regulate it. That principle precedes the birth of the Internet and is hardly out of style in our digital age.

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