Net Neutrality Backers Fight Imaginary Battle, Critics Say

Broadband pipeline owners indicate they want to control, or as they say, “prioritize,” some online content, Misener said. So his firm and other content providers are fighting “to preserve the longstanding openness of the Internet,” he said. Today’s model, which has increased Internet access speed, innovation and benefits to consumers, needs legislative protection, he said.

Network operators make money on consumers and content providers, Misener said. They'll also make money on new services they introduce “under longstanding nondiscrimination rules,” he said. Extracting “rent” from content providers no doubt would aid broadband deployment if the money went back into the network, but there’s no guarantee operators won’t spend it elsewhere, he said.

Despite its huge impact, broadband is evolving, Progress & Freedom Foundation (PFF) Senior Fellow Thomas Lenard said. No one knows what business models will emerge, but common carrier-type rules like net neutrality could “severely inhibit business models with potentially catastrophic results,” he said. Public utility-style regulation on the Internet would quash incentive to invest, Lenard said.

Web watchers can look to other distribution businesses for hints of broadband’s future, Lenard said, adding that some seen as discriminatory arrangements are commonplace. Revenue from an unfettered Internet may have to go to cover the costs of content and pipeline buildout, he said. Some models will require bundling with content, another commonality in the distribution business, he said, citing Bell Canada’s recent VoIP partnership with Clearwire.

Many gripes made by Misener and ilk are moot, since they are hypothetical, Lenard said. U.S. Internet Industry Assn. Pres. Dave McClure said net neutrality backers raise “an issue that doesn’t exist,” calling them morally and technologically dishonest. “We're spinning ourselves in circles and wasting valuable time in a very limited congressional session,” he said: “Why are we dealing with the technical equivalent of monsters under the bed?”

The net neutrality debate resembles hit ABC series Lost, AT&T Senior Vp-Regulatory Planning & Policy Dorothy Attwood said. Both thrive on a swirl of theory, clues and falsehoods, she said. And no one knows the outcome but “there’s a lot of entertainment value,” Attwood said.

Three cadres want a net neutrality law, McClure said. Most are content firms seeking to “game the system” or lawyers and activists who “grew up hating Ma Bell,” he said: “For them, this is the last opportunity not to become irrelevant,” since the U.S. is “marching steadfastly” toward a deregulated telecom regime. When that happens, those who've profited on “Bell bashing” will need “real jobs,” McClure said: “That’s a frightening prospect.” The 3rd faction is “people who believe that Elvis is still alive and in alien abductions,” he added.

The only “real” net neutrality issue is whether the U.S. returns to the “bad, good old days where we keep the telecom industry squarely under the thumb of the federal government,” McClure said. The question is, will consumers or regulators run the broadband market, he said. McClure, admittedly sick of the topic, urged passage of a law mandating that anyone who uses the phrase “net neutrality” be “beaten, tarred, feathered and driven outside the Beltway.” -- Andrew Noyes

Broadband Summit Notebook

The federal govt. should let network operators build the Internet of the future -- not heed net neutrality proponents and protect through legislation and regulation the Internet “as we know it,” which won’t serve our needs, said Joseph Waz, Comcast vp-legal affairs. The debate over net neutrality is the unintended byproduct of the Bells’ push for telecom reform, he said Wed. at the Pike & Fisher Broadband Policy Summit. “We did not expect any major telecommunications legislation in this congress and we weren’t looking for any,” Waz said. Now companies such as Yahoo, Amazon and Google have rushed to push their own agendas to protect their businesses while touting utopian myths about the Internet, Waz said. But neutrality principals have disappeared in e-commerce, he said. Google and Yahoo let advertisers pay for prime real estate on their search pages, and Microsoft bundles more of its software into its operating system, Waz said: “Which of them will be the first to volunteer their business for regulation?” And companies such as Akamai have already created the tiered network that neutrality proponents oppose, Waz said. The current calls to protect the “Internet as we know it,” echo previous attempts to gain regulatory leverage over network operators, Waz said. The 1999 debate over open access is a prime example, he said: “While open access was dressed up as a consumer cause, a look behind the curtain showed who was pulling the strings.” He said it was AOL and EarthLink. An open access provision law would have made wide broadband deployment impossible, he said. Likewise, if Congress adopted the net neutrality rules proposed by the e-commerce industry, the entire cost of building advanced networks would have been transferred to consumers, Waz said. Calling net neutrality regulation a solution “in search of a problem,” Waz expressed support for the approach laid out in Sen. Stevens’ (R-Alaska) bill, which would ask the FCC to monitor the situation in annual reports and make recommendations to Congress if it sees network abuse.