‘Net Neutrality’ Goes 0 for 95

As a reminder of unpredictability in politics, consider what happened when the Progressive Change Campaign Committee last month announced that 95 candidates for Congress had signed a pledge to support “net neutrality.” The candidates promised: “In Congress, I’ll fight to protect Net Neutrality for the entire Internet—wired and wireless—and make sure big corporations aren’t allowed to take control of free speech online.”

Last week all 95 candidates lost. Opponents of net neutrality chortled, and the advocacy group retreated to the argument that regulation of the Internet wasn’t a big issue in the election.

The broader lesson may be that people fear government regulation of what has been a free and open Internet more than they fear what any other institution might do to the Web. This is a good time to reset the argument about how to ensure that the Internet remains a lively place for users and innovators.

Over the past decade, lobbyists have tried to argue that more government control over the Web would somehow result in more freedom. Many in the high-tech world originally supported this view, perhaps because “net neutrality” sounds like the side of the angels. But as other industries have learned, the relationship between regulation and freedom is inverse, not direct. There’s not much wrong with the Internet now, but there’s a big risk in giving regulators more control of an industry in which even the gurus have little idea what innovations will come next.

Everyone agrees that Internet providers shouldn’t discriminate based on content. The question is the role for government. If Comcast, which is in the process of acquiring NBC, started to discriminate against CBS or ABC, its Internet competitors would be quicker than regulators to point to an inferior consumer experience.

To take another example, Rick Carnes, president of the Songwriters Guild of America, points out, “Proponents of net neutrality have long claimed that the Federal Communications Commission needs to lay down some rules ensuring freedom of speech on the Internet. As a songwriter, I have a hard time wrapping my mind around the concept that the FCC is going out of the censorship business and into the protection of free speech.”

In the name of neutrality, lobbyists want to stop Internet providers from managing their networks by charging more to providers or users of bandwidth-hogging services such as video and online games. This amounts to a forced subsidy of certain users of the Web at the expense of others. As demands on the Web escalate, speed and reliability will inevitably depend on more management of the network, including through different prices for different levels of service.

As these debates simmered, the FCC lost several legal cases on whether it can even claim jurisdiction over the Web. The commissioners now threaten to reclassify the Internet so that it would come under the regulatory regime written in the 1930s to help the FCC micromanage a monopoly telephone service. A bipartisan group of more than 200 members of Congress objected earlier this year to the agency reclassifying broadband as a telecommunication service. Having bureaucrats decide on the speeds, levels of service and prices that people and businesses should pay for Web access is not a political winner.

Technology is running laps ahead of regulators. Verizon and Google have jointly proposed that wireless networks should be excluded from the rules that apply to cable and other hardwire providers. They also would exclude “additional, differentiated online services,” referring to the next set of consumer services.

It looks like the future will increasingly feature these new services. The Internet itself is in flux, with Wired magazine recently declaring on its cover: “The Web is Dead.” The provocative point was that many of the most successful new online products rely on the Internet but are no longer delivered through standard Web sites.

For example, Apple offers applications designed specifically for its iPad tablet. Amazon’s Kindle has a special deal with Sprint that allows for lightning-fast downloads of books. The closed community of Facebook regulates how people link to one another. Do we really want regulators in the name of neutrality determining which apps should be available on the iPad? How fair it is that Kindle has fast book downloads? Should the FCC decide how many Facebook friends are too many? It’s not even clear what net neutrality means in the context of these services.

Government’s most active role on the Internet is the regulation of broadband providers, which has resulted in monopolies and duopolies. Indeed, there is little discussion of net neutrality in Europe or Asia, where there is real competition among broadband providers. U.S. politicians and regulators would be better off focusing on ways to increase competition on the Internet—not looking for new ways to regulate it.