Today’s Wall Street Journal features a commentary piece regarding the ongoing “net neutrality” debate, by Bret Swanson, senior fellow at Seattle’s Discovery Institute. Not surprising, it takes the more libertarian approach to the issue. Admidst the big telecom takeover threat hype, Swanson’s thoughts are worth considering. Even some folks I’ve spoken with recently regarding the issue have expressed skepticism that legislation will do any good. Here’s a bit of what Swanson wrote:
Net neutrality supposedly seeks the modest goal of stopping the cable TV or telecom companies from “blocking” or “degrading” the content or services of online companies like Google, Vonage or AOL, which are invading traditional voice and video businesses….
Blocking and degrading Internet access would quite simply be business suicide for incumbent service providers. Compared to cable’s other content operations like basic and premium TV channels, its broadband cable modem services are more than 50 times as profitable per unit of bandwidth consumed. This means that with just a tiny sliver of the usable bandwidth in its pipes, cable’s Internet services supply about 20% of the revenue and the majority of their net income. Does anyone really think the bandwidth providers are going to kill their golden goose?
A net neutrality regime would invite endless litigation among service providers, hardware and software vendors, and content and applications dot-coms. Who gets access, when, and on what terms, to the other’s network, the other’s operating system, the other’s platform? These questions — the very ones that have stifled innovation in telecom for the last two decades — should be left to business competition and, if all else fails, to common law and antitrust. Congress and the FCC cannot be the arbiters of every connection, interface and transaction. And if such laws somehow only targeted the incumbent bandwidth service providers, then they would turn out to be merely malicious political tools for business rivals, decidedly not “neutral” and unlikely to survive the scrutiny of the courts.
AT&T’s biggest challenge may be branding itself to a new generation of voracious communications consumers who are oblivious to “long-distance” and only know a world of no-distance chats, texts and blogs. It would be far better if Washington listened to these teeny-bopper baby belles instead of basing its merger, net neutrality and franchising policies on a Great Grandma Bell world that no longer exists.
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