Framing Net Neutrality

db070114.gif Here’s an interesting exercise in framing net neutrality:
On the one side are traditional media – phone and cable companies, the carriers – in rare agreement. They do not want to be regulated, and they want to preserve the profitability potential that protects their network upgrades. They are therefore joined by some hardware tech firms. On the other side is what might be called the internet-industrial complex – consisting of idealistic net community folks, small start-ups, large Silicon Valley corporations pretending to be both – and Hollywood, in another strange bed fellowship.

The US Congress is in the middle; by the latest count six bills are pending, and while none is likely to be passed for now, the process itself has been a boon.

A third way for net neutrality, By Eli Noam, Financial Times, 29 August 2006

Note “internet-industrial complex”, in analogy to Eisenhower’s phrase, “military-industrial complex”. Yet the cablecos and telcos are said to be “in rare agreement” when actually they have long been acting on the same side on this issue; after all, it’s in both their (short-term) interests to keep the number of players down. With no competition, there’s no real market, and thus no real competition (which long-term means they won’t be competitive with their international competitors, which are already offering speeds ten times faster for similar prices).

But the best part is treating net neutrality as if there were a real controversy that must be resolved by Hegelian dialectic to produce a third-way synthesis. This is the old “teach the controversy” approach, as illustrated by Doonesbury regarding evolution or global warming. What does FT think the controversy is in this case?

To FT’s credit, it lists seven different interpretations of net neutrality; I’ve numbered them here:

  1. No different quality grades (“fast lanes”) for internet service
  2. No price discrimination among internet providers
  3. No monopoly price charged to content and applications providers
  4. Nothing charged to the providers for transmitting their content
  5. No discrimination on content providers who compete with the carriers’ own content
  6. No selectivity by the carriers over content they transmit
  7. No blocking of the access of users to some websites
Number 4 is a bit disingenuous. If by providers they mean outfits like Google or Yahoo! or Amazon, all those companies already pay for access to the Internet so they can transmit their content. The issue is that they don’t want to pay a surcharge to the duopoly.

Even more subtle is the way each of the seven different items is phrased in terms of providers, carriers, and users, i.e., in terms of a producer-consumer model with the “carriers” as some sort of disinterested party in the middle. Yet a basic issue is that the incumbent duopoly carriers want to be producers and providers, as well, and AT&T for example has already started policing “their” network on behalf of Hollywood, while the CEO of Time Warner has declared war.

Further, what most “users” want out of the Internet is not centralized broadcast content provided by a few providers. What they want isn’t even primarily speed; it’s participation.

The FT does recognize the free speech nature of items 6 and 7, but then proceeds to pooh pooh them:

The latter two issues are by far the most important to the entire society since they affect speech, culture, and politics. It is easy to agree to them (though some have made the carrier companies’ First Amendment argument in opposition). Therefore, proponents of net neutrality tend to latch to them their other concerns which are more in the nature of an economic dogfight among companies.
Well, no, it’s more in the nature of a few big companies (the cableco and telco duopoly) wanting to control the Internet to their short-term profit, vs. everybody else. It is about free speech. Given that most of the other media in the U.S. are owned by less than half a dozen companies, that makes it about democracy and preservation of the Republic, not to mention innovation and international competitiveness.

The article tries to say there are two equal sides:

Both sides have considerable market power – the carriers over the pipes, and several of the internet companies over major instrumentalities. I have only two meaningful options for broadband connectivity, but the same can be said for my search engines, whose proprietary selection and priority system govern my access into the world of information. And while I have no beef with the folks who run them today, who knows what less benign people might do in the future, and whether alternatives can still emerge if economies of scale are high.
Well, no, actually there are more than two search engines: Google, Yahoo!, Ask, MSN, AOL, Comcast, and Earthlink, among others, not to mention more specific search engines such as A9, Google/Products, nextag, and pricewatch, among others, for product searches. And as long as the net remains neutral, more can keep popping up.

Plus framing net neutrality as a controversy among two corporate sides leaves out all the “users”, i.e., the participants, the people, and the common good.

The article later tries to recast the “controversy” as a triangle among “content and applications” (including google, Yahoo!, HBO, and Vonage), “users”, and “pipes” (e.g., Comcast and AT&T). Once again, this is a producer-consumer model that leaves no room for participation (even YouTube is omitted).

Finally, the article claims any net neutrality legislation would have to be complicated and intrusive, without any argument to back that up.

So what is the article’s recommended third way? Well, that’s complicated. Some parts of it look good, such as incentives for more competition for “last-mile pipes”.

Other parts don’t look so good, such as depending upon anti-trust actions to deal with anti-competitive behavior. That hasn’t worked so well with Microsoft or with the former AT&T, broken up a few decades ago, but now reformed from sea to sea.

The article finally runs off the rails entirely when it says net neutrality is more of a problem in Japan, where in fact there is more competition and much faster speeds at reasonable prices. In conclusion:

Thus, the American debate also helps set the way for others’ future information media scenario.
Well, no, it’s not a two-sided debate, and the U.S. would do well to learn from the rest of the world, so maybe the U.S. wouldn’t be number 25 worldwide.