Net losses?

Be wary of government on neutrality issue

Large corporations can’t always be trusted to do the right thing. But neither can governments.


So when either considers tinkering with the Internet – our most pervasive information source and an increasingly indispensable part of our lives – we are naturally cautious.

You should be, too.

The Federal Communications Commission this year will make decisions with wide-ranging implications on how companies deliver web content to consumers.

The proposed “net neutrality” rules currently out for public comment will define what constitutes a “free market” on the Internet – and possibly open the door to increased governmental regulation.

The FCC’s previous regulations were struck down by a federal court earlier this year. Those rules prevented Internet service providers, such as Comcast, Verizon and AT&T, from offering web-content producers, such as Netflix and Amazon, faster data-delivery speeds for a higher fee.

The practice finally would free the ISPs to create a tiered delivery system, with so-called “fast lane” service to those willing to pay premium prices to reach millions of households and businesses. It also would likely prompt ISPs to expand network capacities and invest in new technologies to better meet consumers’ insatiable appetite for data.

However, the tiered-system concept, which the FCC calls “paid prioritization,” goes against some people’s notion of a “free Internet,” where everyone is entitled to the same access and all data is equal. Hence, the “Net neutrality” debate.

The courts say the FCC can’t prohibit tiers as long as the Internet remains classified as an “information service.” So the danger is that the Democrat-controlled FCC, under the banner of net neutrality, will move to reclassify ISPs as “common carrier” telecommunications services, subjecting them to monopoly-style public utility rules, regulations and taxes.

That should make everyone cringe.

Do we want a vital segment of the economy that has flourished for two decades without significant government controls subjected to the bureaucratic whims of Washington? Do we want the nation’s 20th-century regulator of broadcasters and phone companies morphing into a 21st-century Internet traffic cop?

We don’t need a “Federal Internet Commission.”

In addition to the self- vs. government-regulation debate, the FCC will get to define what constitutes a “free market” in cyberspace. It boils down to this: Does free mean ISPs pushing all content equally through their pipes, or is free when ISPs can offer faster service to those willing to pay for it?

We believe it is the latter.

First, not all web content is equal, nor should it be treated as such. Even if you were to agree pornography and cat videos are as important as a telehealth company’s remote-video diagnosis – which they are not – why be upset the medical company pays a little extra to ensure its life-saving service has real-time connectivity on an ISP fast lane?

Shouldn’t a homeowner who pays for an alarm service have some assurances his service will not be disrupted on Friday nights because too many of his neighbors are streaming movies on Netflix?

Those seeking stricter Internet oversight appear to be anticipating that the free-market system will fail without FCC safeguards in place.

Pay-for-speed opponents, for example, argue that it would be unfair to smaller web ventures, and that it gives large ISPs – many of whom are sole providers in small- and midsized markets – the ability to turn the Internet into a sort of protection racket, where those who fail to “pay the price” are made to suffer.

But the FCC already prohibits ISPs from degrading baseline service, so companies can’t punish anyone by making the “slow lane” slower. And if they did, antitrust regulators such as the Federal Trade Commission could step in.

Some also fear that ISPs, such as Comcast, which owns NBCUniversal, will show bias for their own products. Such inequities have not occurred, and if they did, they, too, could be addressed under existing laws.

If you doubt antitrust authorities are up to the task of cracking down on problems that don’t yet exist, what makes you think the FCC would do any better?

Keep in mind that “paid prioritization” is already a standard business practice. Do courier companies not charge a premium for overnight delivery? Do cellular companies not charge customers more for faster data speeds? Do airlines not charge first-class fliers pricier fares for more attentive service and better seats?

Why, then, is the practice suddenly considered predatory when it’s applied to Internet data?

If you’re really concerned about pricing, you should know that reclassifying ISPs as “common carriers” would expose broadband services to utility-style state and local taxes, effectively increasing your Internet costs.

In case you forgot how much of your telecommunications bill went to the government, you might want to look up the Heartland Institute study a few years ago that estimated about 17 percent of your bill was receipt-based service taxes and fees.

And if you need one more reason to be wary of increased regulation, the proposed FCCs rules give the government a say over content. The new rules include the well-intentioned

provision prohibiting ISPs from blocking “legal content.” But who defines what content is legal? Government regulators?

Everyone can agree on what constitutes “illegal” content when it comes to cut-and-dried matters such as child pornography. But what about Edward Snowden’s leaks about the National Security Agency? Would the government consider that “legal content”? What about websites critical of the government?

We’ve seen enough meddling with the First Amendment on public airwaves. We don’t need bureaucrats intruding in the copper wires and fiber optic lines connecting our homes to the rest of the world.

Heavy regulation seldom benefits the marketplace, yet that’s what many people are asking be done to the country’s largest market.

The FCC public comment period closes in September. Those asking for a heavier government hand in the Internet should tread lightly, because they may get exactly what they wish for.



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