Opinion: What's Wrong with Net Neutrality

By Larry Downes

Opinion: What's Wrong with Net Neutrality

Tired of hearing about "net neutrality"? Better go away for a while then, because the overheated debate, which has spilled into television attack ads, isn't ending any time soon. For one thing, net neutrality has become a potentially lethal obstruction in efforts by Congress to pass a major overhaul of federal communications law—it may even sink the effort for this year.

With stakes that high, you'd think that at least there would be a simple definition of what net neutrality even means. But no. Lobbyists, pundits and industry leaders have revved up their rhetorical engines, flinging metaphors and topping each other's hyperbole to the point where bloggers sound measured by comparison. Net neutrality is "simply" about "fast" and "slow" lanes on the information interstate, says one set of lobbyists; without it, according to another group, Congress will be "stripping the Internet of the First Amendment" and turning the "free market" for information into a "planned economy," like the failed Soviet system. Steve Forbes calls net neutrality "an inexcusable barrier to the tradition of innovation at the heart of the Internet," while Craigslist founder Craig Newmark writes, "It's just fairness. Americans want to play fair, work hard and get ahead. That's what net neutrality is about."

Time out guys! As best I can determine, net neutrality is something DSL providers already do, which is to treat all data traffic equally, regardless of source or destination and without peeking at the content. Here's a packet—we don't know or care who it's from or what it contains. Find its optimal routing given current traffic patterns and send it on its way. In other words, eBay can't pay AT&T or Verizon to have its pages delivered faster than pages from Google or Yahoo!.

As traditional phone companies prepare to compete with cable and satellite providers in the TV business, however, supporters of net neutrality fear that the temptation to tinker with this architecture will prove irresistible. So they want to make that architecture a matter of federal law. Their opponents (phone and cable companies and their hardware suppliers) argue that doing so will destroy their incentive to continue investing in communications infrastructure. There are half a dozen different neutrality bills floating around in the House and Senate, though none have passed to date.

At its core, the net neutrality controversy is a new round in two very old fights, one about deregulation of the former telephone monopoly and the other about the appropriate role for government in legislating new technologies.

Next page: Deregulation


Net neutrality is a new front in the continuing struggle, both in the U.S. and abroad, to redefine communications law. It used to be that the telephone system handled two-way telephone calls, the cable networks sent programming over coaxial cable, and computer companies provided data services. The respective technologies employed by each made it difficult, even impossible, for them to compete with one another. But IT has the unfortunate habit of converging and di verging in unpredictable ways, and there is no longer a meaningful distinction between the "telecommunications industry" and any other part of the information business.

Now, at least in theory, every major communications technology—cable, telephone, wireless, satellite, cellular—can do everything, in large part because of the spread and enhancement of (open, neutral) Internet protocols. But despite ten years of deregulation in the U.S., some information providers (AT&T and Verizon, among others) are still heavily regulated by the FCC, while others (cable, satellite and content providers) are not. Congress, for example, just increased by a factor of ten the amount of fines the FCC can levy on broadcasters who air indecent material, such as Janet Jackson's Super Bowl wardrobe malfunction. But these fines apply only to "free" TV, not premium cable (e.g., HBO) or satellite (e.g., Howard Stern). There's no reason for the different treatment.

So it's at least a little disingenuous for the proponents of net neutrality to talk about democracy and level playing fields and the American Way. Many of the companies currently opposing mandatory neutrality have been operating at a regulatory disadvantage for a very long time, and the rationale for that different treatment is disappearing. Seen this way, net neutrality is another version of the fight that's been going on since Judge Harold Greene split up the telecom baby back in 1984, while praying that technology would keep the pieces separate—which, of course, technology refused to do. Whether or not tiered pricing for network traffic (fast and slow lanes) would help or hurt telecommunications companies, we should acknowledge that there's nothing "neutral" about the current legal rules governing who can and cannot make money in the information business, or how they can do so. Increasingly, there's nothing rational about these rules, either.

Next page: Government and Technology

Government and Technology

Government and Technology
Assuming for the moment that net neutrality is a good idea—that it is a feature of the current Internet that adds value to the economy as a whole—how should it be preserved? Up until now, neutrality has been both a feature and a limit of the packet-switching architecture of the TCP/IP protocol—one, however, that cable providers have long worked around. (If you get Internet access through cable, the provider already prioritizes the high-bandwidth activity of program delivery, which is why cable providers are currently arguing against net neutrality.)

If the fears of neutrality advocates—that broadband providers will break with tradition in ways contrary to their own long-term interests—are well-founded, how should we stop them?. The free-market types, such as Steve Forbes, argue that consumers will vote with their wallets and avoid providers who unfairly "discriminate."

If, however, the choices for broadband provisioning are limited to one or two providers (as they are in many parts of the U.S.), the market may not work. All the net neutrality advocates want is legislation that preserves the status quo—a needed protection against possible market failure.

On the surface, this sounds like a fairly minimal intrusion on an otherwise well-functioning market, one unlikely to add new costs of its own to enforce. Just forbid the phone companies from changing their technical architecture, in other words—something the companies insist they don't plan to do anyway.

But is law the answer? Under the proposed Internet Freedom Preservation Act, to pick just one example, the definition of "neutrality" goes on for several hundred words, and the implementing "rules" are left to the FCC to define. How would the FCC ensure that broadband providers stay neutral? Would consumers complain about individual violations, as with the Do Not Call list? Would the FCC set up compliance monitoring of network traffic? Since the practice to be banned is largely theoretical, and based on technology yet to be developed, the likelihood of accurately defining what is illegal is very low, and the chances of inadvertently encouraging inefficient workarounds high. The market hasn't even failed yet. How can we correct it?

The net neutrality "crisis," I predict, will reach a crescendo in the next few months, then quickly disappear without any resolution. Which is just as well. But until we confront the underlying legal issues gumming up the information industries, we'll just keep spinning our wheels.

This article was originally published on 07-24-2006