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February 8, 2006

Net Neutraility in the News

Net neutrality is an issue that's breaking into the news.  The idea that telcos and other network managers should be able to restrict their subscribers from getting to particular web sites, or to degrade services in favor of their own is getting legislative attention.  There is a draft bill circulating through the House that has generated some criticism from content providers (Google, Amazon, Microsoft, etc.).

The Senate Commerce Committee held a hearing on the issue yesterday (transcripts and video of the hearing available here), with panelists and witnesses from the predictable players.  Vin Cerf, Vice President and Chief Internet Evangelist for Google was there, along with Walter McCormick, President and CEO, United States Telecom Association, Jeffrey Citron, Chairman and CEO, Vonage and witnesses from other industry heavyweights.  From the academic side and consumer side of the angle were appearances by Mr. Kyle Dixon, Senior Fellow and Director of the federal Institute for Regulatory Law & Economics, The Progress & Freedom Foundation, Prof. Lawrence Lessig, Standford Law School, and Prof. J. Gregory Sidak, Georgetown University Law Center, among others.

The issues pit the telcos and other backbone providers who would like to get more money for their investment against content providers.  Ed Whitacre, head of the old SBC but now new AT&T has made statements about how web sites were getting a free ride from his company's pipes.  The implication that SBC wanted to find a way to charge for access to web sites beyond web access subscriptions certainly got the attention of people.  So did comments by Verizon's senior vice president and deputy general counsel John Thorne when he said that Google gets a free ride while riding on cheap servers.

Hardly hidden in all of this is the fact that these companies are dying to serve up television and video on demand - all bandwidth hogs - and they would like to upgrade their networks to make that bigger bandwidth service available without sharing it with service competitors.  The companies, of course, say there is no need for regulation as the problem, if any, has not even occurred yet.  There was one report a while back of a local carrier in the backwoods of Minnesota that prevented customers from subscribing to VoIP services, but the FCC stepped in and pulled the plug on that action.

The companies are urging that the market work it out rather than have congress put rules in place they say will have a negative incentive on investing in upgrading their networks.  Of course, if they don't upgrade their networks, they will have a hard time providing all that self-generated content.  The also say that it is economic suicide to degrade Internet speeds, which is true as the Internet is used today.  But legislation that may give them the right could turn the Internet into the old systems when we had Compuserves and AOLs.  Even AOL learned that they couldn't maintain a subscription base when they competed with the "free" Internet.  Even they had to open up.  This legislation could take us back to those days, with the only benefit that it would all be faster.

Perhaps the salvation in all of this is the trend towards municipal networks that give free wireless to their residents.  That's another form of competition the telcos do not want.  Google is building the municipal network for San Francisco.  Perhaps their revenge will be to do the same in other places across the U.S.

February 8, 2006 | Permalink

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