I’m probably not the first person to point out that the Internet—the interconnected series of networks that began its life in the 1960s under the auspices of the Pentagon’s Advanced Research Projects Agency—has probably been one of the biggest economic engines ever created. It’s easily the modern world’s most important global asset: a critical piece of infrastructure that allows for an unprecedented exchange of information and the foundation of what has become a literal breeding ground of innovation and new wealth.
Which is why the desire to kill it off by the normally pro-business, anti-regulation crowd is so perplexing.
A little history is important. One of the founding principles of the Internet is that all data on the network is treated equally. A data packet is a data packet, and the network doesn’t discriminate on how to treat that packet. It simply passes it along from one node to the next, until it reaches its final destination (which is usually some application or service on one of your digital devices). This precept came to be known as “network neutrality,” and is now at the center of a regulatory debate.
To use an imperfect metaphor, if the Internet is a series of tubes (with obligatory hat tip to the late Senator Stevens, who coined this unfortunate phrase), then the water flowing through those tubes is just that: water. You might use some of it to do your laundry, or wash your car, or to prepare your dinner…but your municipal utility wouldn’t arbitrarily reduce or increase your water pressure because you decided you wanted to take a shower tonight instead of drawing your usual bath. The suggestion alone is preposterous: after all, you’ve paid for that 1” main to your home, right?
And yet, that’s exactly what broadband providers will start doing if the FCC’s recent proposal to create “Internet fast lanes” is approved. In a nutshell, the proposed rule from FCC Chairman Tom Wheeler would prescribe two tiers of service: a “minimum level of access”—effectively, a slow lane—and a new, revenue-enhancing “fast lane” that would, for the first time ever, allow ISPs to charge content providers like Netflix, Apple, and others for speedier access to their end customers (i.e.: you and me). Overnight, start up companies, small businesses, and other entities that rely on the Internet would need to start paying a toll to large ISPs to guarantee that their traffic is delivered to consumers in the most efficient way possible. This completely turns the Internet as we know it today upside-down.
Think about it this way: most consumers are already paying for a certain amount of bandwidth when they sign up for Internet service. In my case, I pay Comcast monthly for a 100Mbps connection, which means I have a reasonable expectation that they will provide me with whatever content I request from the Internet as fast as my content provider (Netflix, Apple, Facebook, etc.) can send it to me—at least up to 100Mbps. What I don’t expect is that they will then turn around and demand additional shake-down money from my content provider to ensure that I get that content at 100Mbps…I’ve already paid for that transit.
In the past, competition insured that net neutrality was self-regulated by the ISP industry. After all, it wouldn’t make sense for an ISP to favor certain Internet content providers over others because consumers had the ability to hop to a different provider if their service was degraded. However, today’s market is an oligopoly dominated by two large providers: Comcast and Time Warner Cable—who, not coincidentally, have petitioned the FCC to be allowed to merge. The combined companies would control over 60% of the broadband market, further eroding consumer choice and creating a system where a single provider could levy a private tax on content providers in order to provide throughput to consumer are already paying ISPs for data transit.
Overturning net neutrality isn’t just bad for consumers, though, it’s also bad for businesses. The historical open nature of the Internet has created a technical and business meritocracy of sorts: anybody with a good idea, some programming skills, and access to a server could compete directly with entrenched, well-capitalized market players. Net neutrality brought us disruptive innovations such as e-mail, instant messaging, online stock trading, digital music and video, new telephony services, and also helped create giants like Amazon, Google, Facebook, Twitter as well as countless others. Overturning net neutrality will simply cripple this kind of innovation, since most start-up companies won’t be able to bid against the giants to ensure that their traffic is delivered in the most efficient way possible.
It’s never easy to argue for regulation, but sometimes the best way to ensure a continued level playing field is through an impartial referee. Such is the case with net neutrality. The FCC’s current proposal to allow Internet fast lanes is misguided and will only serve to cripple the innovation and hurt small businesses. Instead, the FCC should use their power under Title II of the 1934 Telecommunications Act to reclassify broadband providers as common carriers…just like your water utility. After all, nobody likes a tepid, weak shower.